Deere & Company's global net sales and revenues increased 11 percent, to $13.370 billion, for the second quarter of 2022 and rose 8 percent for the first half of the company's fiscal year.
Net sales for Deere’s Construction & Forestry segment increased by 9 percent for the quarter, with operating profit up 66 percent compared to the same period last year. Deere says sales for this segment rose “due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture and price realization.”
These items were partially offset by higher production costs, issues related to the events in Russia and Ukraine and a less-favorable product mix.
Deere expects U.S. and Canadian construction equipment sales to be up around 10 percent for 2022, while compact equipment sales will remain flat to a 5 percent increase over 2021.
The company’s Agricultural & Turf segment is forecasting greater gains, with sales expected to be up approximately 20 percent.
“Deere’s second-quarter performance reflected a continuation of strong demand even as we face supply-chain pressures affecting production levels and delivery schedules,” said John C. May, chairman and chief executive officer. “Deere employees, suppliers and dealers are working hard to address these challenges. We are proud of their extraordinary efforts to get products to our customers as soon as possible under the challenging circumstances.”
Deere is now forecasting its net income to be in a range of $7 billion to $7.4 billion for fiscal year 2022, which includes a net $220 million gain from special items in the second quarter.
“Looking ahead, we believe demand for farm equipment will continue benefiting from positive fundamentals in spite of availability concerns and inflationary pressures affecting our customers’ input costs,” May said. “The company’s smart industrial strategy and recently announced Leap Ambitions are focused on helping customers manage higher costs and increasingly scarce inputs, while improving their yields, through the use of our integrated technologies.”