Sales of John Deere equipment increased 4 percent in the fourth quarter and were up 5 percent for the fiscal year, which ended October 28. The Moline, Illinois-based company reported sales of $39.3 billion for the year.
The company reported net income of $3.3 billion, up from $2.4 billion in 2018.
“John Deere’s performance reflected continued uncertainties in the agricultural sector," said John C. May, CEO, in a prepared statement. “Lingering trade tensions coupled with a year of difficult growing and harvesting conditions have caused many farmers to become cautious about making major investments in new equipment. Additionally, financial services results have come under pressure due to operating-lease losses. At the same time, general economic conditions have remained favorable. This has supported demand for smaller equipment and led to solid results for Deere's construction and forestry business, which had a record year for sales and operating profit.”
Sales of construction equipment and forestry totaled $11.2 billion for the year, an increase of 10 percent over 2018. The company reported that sales were higher primarily due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation.
The inclusion of Wirtgen’s sales for two additional months in 2019 accounted for about 4 percent of the year’s net sales increase.
The company expects worldwide sales of construction and forestry equipment to be down 10 to 15 percent for 2020, with foreign-currency rates having an unfavorable translation effect of 1 percent. The outlook reflects slowing construction activity as well as the company’s efforts to manage dealer inventory levels.
Net income for fiscal 2020 is forecast to be in a range of $2.7 billion to $3.1 billion, the company says.
“Despite present challenges, the longer-term outlook for our businesses remains healthy and points to a promising future for Deere,” May said. “We are particularly encouraged by the adoption of precision technologies and believe we are well-positioned to be a leader in the delivery of smarter, more efficient and sustainable solutions to our customers. At the same time, we are committed to the successful execution of our strategic plan and have initiated a series of measures to create a leaner organizational structure that can operate with more speed and agility. We're confident these steps will lead to improved efficiencies and help the company focus its resources and investments on areas that have the greatest impact on performance.”
Source: John Deere & Co.
