Deere Posts Higher 4Q Profit, Expects Higher Earnings in Fiscal 2021
November 25 2020 - 7:18AM
Dow Jones News
By Dave Sebastian
Deere & Co. said profit rose for the latest quarter despite
revenue falling, and said it expects higher earnings in the current
fiscal year amid improving farm economy conditions and
stabilization in the construction and forestry markets.
The Moline, Ill., maker of agricultural, lawn-care and
construction equipment Wednesday posted a fourth-quarter profit of
$757 million, or $2.39 a share, compared with $722 million, or
$2.27 a share, in the comparable period last year.
Net sales and revenues fell 2% to $9.73 billion. Construction
and forestry sales fell 16%, equipment-operations sales fell 1% and
agriculture and turf sales rose 8% Financial services net income
more than doubled to $186 million.
Costs and expenses fell to $8.62 billion from $9.07 billion,
though impairment charges and employee-separation costs of $211
million and $458 million after tax, respectively, weighed on
results.
The company expects fiscal 2021 net income of $3.6 billion to $4
billion. It posted fiscal 2020 net income of $2.75 billion, better
than the $2.25 billion it expected in August.
"Higher crop prices and improved fundamentals are leading to
renewed optimism in the agricultural sector and improving demand
for farm equipment," Chairman and Chief Executive John May
said.
Deere said it sees fiscal 2021 agriculture and turf sales rising
10% to 15%, and construction and forestry sales rising 5% to 10%
due to expected recovery from the Covid-19 pandemic and benefits
from residential building activity. It sees full-year net income
for its financial-services segment of about $630 million, with
expected benefits from favorable financing spreads, lower losses on
operating-lease residual values and income earned on a higher
average portfolio.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
November 25, 2020 07:03 ET (12:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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