Deere & Company posted net income of $ 811 million, or $ 2.57 per share, for the third quarter of fiscal year ended August 2, 2020. Last year, Deere & Company’s net income for the third quarter ended July 28, 2019 was $ 899 million, or $ 2.81 per share.
For the first nine months of fiscal year the company reported net income of $ 1.993 billion, or $ 6.30 per share. In the same period last year, it made $ 2.532 billion or $ 7.87 per share. Global sales and earnings were down 11% in the third quarter to $ 8.925 billion.
For the first nine months, revenues and earnings decreased 12% to $ 25.809 billion. Machine sales were $ 7.859 billion for the quarter and $ 22.612 billion for the first nine months of fiscal year. In the comparable periods of the previous year, it generated $ 8.969 billion and $ 26.182 billion, respectively.
Business outlook
Fiscal 2020 net income is expected to be $ 2.25 billion. Many uncertainties remain with regard to the impact of the pandemic, which could have a negative impact on business results and the financial situation. In addition, the company has offered employees extensive voluntary termination agreements, which will be implemented in the fourth quarter and are intended to give the company a leaner and more agile structure.
The cost of the programs is estimated at $ 175 million pre-tax in the business outlook and the annual savings are estimated at $ 175 million.
Sales for agricultural machinery and machines for lawn and property maintenance fell in the third quarter. Lower delivery quantities and unfavorable exchange rates have had a disadvantageous effect. The effect was partially offset by better prices. Operating profit increased primarily due to better pricing and lower selling, administration and overhead (SA&G) costs.
Agricultural machinery & machines for lawn and property maintenance
John Deere’s sales of farm equipment and lawn and property maintenance equipment are projected to decline 10% this fiscal year. A negative influence of the exchange rates of 2% is taken into account. For the agricultural machinery industry, a decline of 5 to 10% compared to the previous year is expected for the USA and Canada.
In Europe, industry sales are also likely to decline by 5 to 10%. In South America, manufacturers expect tractors and combine harvesters to have 10 to 15% lower sales. A slight decline is expected for Asia. Industry sales of lawn and property maintenance machines in the US and Canada are projected to be 5% lower in 2020.
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