Deere & Co. benefits from improving global farm economy, leading to 57 percent fourth quarter rise.
Earnings for the August-through-October period climbed to $422.1 million, or $1.88 per share, from $277.3 million, or $1.20 per share, in the previous year. Analysts expected $1.55-per-share.
Revenue grew 20 percent to $6.14 billion from $5.12 billion following of 35 percent increases in sales of both agricultural equipment and commercial and consumer equipment. Analysts projected sales of $5.8 billion.
In 2007, Deere benefited from an improving global farm economy yet saw weakening in the construction, forestry, commercial and consumer sectors, chiefly as a result of the U.S. housing downturn.
Expanding base, business
For the full fiscal year, net income was $1.82 billion, or $8.01 per share, up eight percent from $1.69 billion, or $7.18 per share, a year earlier while revenue was $24.1 billion, up nine percent from $22.1 billion, said the farm equipment maker.
Robert W Lane, chairman and chief executive officer said that Deere’s performance reflected the company’s plans to create a ‘fundamentally more profitable, resilient business,’ done so by entering new markets and expanding its global customer base.
Illinois-based Deere projects equally strong profit and sales gains for 2008, forecasting earnings of about $2.1 billion and first-quarter profit of approximately $325 million.
Equipment sales are expected to climb by about 12 percent for the year and to be up about 25 percent for the first quarter, the company said. Equipment operations revenue increased to $5.42 billion from $4.49 billion in the prior year and $21.59 billion for the year.
Even so, Deere said that it was affected by the US housing downturn which weakened its construction, forestry, commercial and consumer sectors.
November 21, 2007