Deere & Company’s net income grew 62 percent in the second quarter of its fiscal year 2017, which ended April 30. Net income rose to $820.4 million compared to the $495.4 million in the same period last year.
Net income for the first six months of the year reached $996.2 million, compared to $749.8 million for the first six months of 2016. Net sales and revenues worldwide grew 5 percent for the first quarter, to $8.28 billion, with net sales for equipment operations reaching $7.26 billion, up about 2 percent.
“John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization,” says Samuel R. Allen, chairman and CEO. “We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery. Deere’s performance also reflects the sound execution of our operating plans, the strength of a broad product portfolio, and the impact of our actions to develop a more agile cost structure. As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year.”
The company’s equipment operations reported operating profit of $1.11 billion for the quarter, compared with $688 million for the same period in 2016. Deere reports this boost “was primarily driven by price realization, the impact of a favorable sales mix, favorable effects of foreign-currency exchange and higher shipment volumes, partially offset by higher warranty costs.”
Net income for equipment operations reached $694 million for the period, up by more than 76 percent compared to the $393 million in the first quarter last year.
Construction and forestry sales grew 7 percent in the first quarter, with operating profit growing roughly 46 percent to $108 million.
Deere forecasts sales to increase roughly 9 percent for FY2017 and grow about 18 percent for the third quarter compared to 2016. The company says net sales and revenues could also grow close to 9 percent for the year, with net income estimated at $2 billion.
“Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle,” Allen says. “This resilience illustrates our success driving improved operating efficiencies and developing a wider range of revenue sources. It also shows the impact of the company’s consistent investments in advanced technology, new products and additional markets. These actions are leading to strong performance in 2017, and they reinforce our conviction that Deere is well-positioned to deliver significant value to customers and investors over the long term.”