Net income attributable to Deere & Company was $904.3 million for the second quarter ended April 30 compared with $547.5 million for the same period last year. That’s a 65-percent jump.
Second-quarter 2010 earnings were $677.0 million, or $1.58 per share, excluding a tax charge of $129.5 million, or $0.30 per share, related to the enactment of U.S. health-care legislation.
For the first six months of the year, net income attributable to Deere & Company was $1.418 billion compared with $790.7 million last year. Six-month 2010 results also were affected by the tax charge.
Worldwide net sales and revenues increased 25 percent, to $8.910 billion, for the second quarter and were up 26 percent to $15.029 billion for six months. Net sales of the equipment operations were $8.328 billion for the quarter and $13.841 billion for six months, compared with $6.548 billion and $10.785 billion for the corresponding periods last year.
"With our record second-quarter performance, John Deere is well on its way to a year of exceptional results," said Samuel R. Allen, chairman and chief executive officer. "Our success reflects strong demand for our innovative lines of equipment and the continued skillful execution of our business plans. Deere's actions to expand its global competitive position are attracting new customers worldwide and making a major contribution to our results."
Sales of large farm machinery, particularly in the United States, Canada and Brazil, are continuing to support the company's performance. Construction equipment shipments are moving higher in spite of lingering weakness in the residential and commercial construction sectors. "Markets for construction equipment in the U.S. and for farm machinery in Europe are in the early stages of recovery," Allen said. "We're optimistic about the longer-term opportunity for further improvement in these and other key areas."
Company Outlook & Summary
Company equipment sales are projected to be up 21 to 23 percent for fiscal 2011 and up about 20 percent for the third quarter compared with the same periods a year ago. Included is a favorable currency-translation impact of about 3 percent for the year and about 6 percent for the quarter. For the full year, net income attributable to Deere & Company is anticipated to be about $2.650 billion.
The annual forecast includes a negative impact of approximately $300 million in sales and $70 million in operating profit resulting from the recent Japanese earthquake and tsunami.
According to Allen, the company's record of strong financial performance is helping support aggressive levels of organic growth. "Our consistent investment in new products and expanded global capacity puts the company on a solid footing for the future," he said. "As a result, John Deere is well-positioned to address the world's growing need for agricultural commodities, shelter and infrastructure. We believe these developments will have a positive impact on demand for productive farm and construction equipment in the years ahead and hold exciting promise for the company well into the future."
Agriculture & Turf. Sales rose 24 percent for the quarter and 23 percent for six months largely due to higher shipment volumes, improved price realization and the favorable effects of currency translation.
Worldwide sales of agriculture and turf equipment are forecast to increase by about 20 percent for full-year 2011, benefiting from favorable global farm conditions and a positive currency-translation impact of about 4 percent. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be flat after experiencing modest recovery in 2010.
Construction & Forestry. Construction and forestry sales climbed 46 percent for the quarter and 61 percent for six months mainly due to higher shipment volumes and improved price realization. The division had operating profit of $105 million for the quarter and $194 million for six months, compared with last year's operating profit of $36 million in the quarter and an operating loss of $1 million for the six-month period. The improvement in both periods was primarily due to higher shipment and production volumes and improved price realization, partially offset by higher selling, administrative and general expenses and increased raw-material costs.
Deere's worldwide sales of construction and forestry equipment are forecast to rise by about 35 percent for 2011. The increase reflects somewhat-improved market conditions in relation to the prior year's low level and increased activity outside of the U.S. and Canada. Construction equipment sales to independent rental companies are seeing growth, while world forestry markets are experiencing further improvement as a result of strong wood and pulp prices.
