Deere & Co. said fiscal first-quarter profit increased 30% with farmers buying new equipment.
The company announced worldwide net income of $222.8 million, or $.89 per share, for the first quarter ended January 31, compared with net income for the same period last year of $170.8 million, or $.68 per share.
Said Robert W. Lane, chairman and CEO: “Deere’s focus on improved operating performance has served us well. Our pattern of consistent product investment has allowed customers to appreciate the value in our advanced new models of equipment. Our steps to achieve more flexibility in manufacturing and order fulfillment have also played a role in our success. As a result, the company is positioned to meet our objectives for strong financial performance.”
Worldwide net sales and revenues grew 18 percent to $4.127 billion for the first quarter compared with $3.484 billion a year ago. Net sales of the equipment operations were $3.526 billion for the quarter versus $2.912 billion last year.
The company’s equipment sales in the U.S. and Canada rose 20 percent for the quarter. Outside the U.S. and Canada, sales increased by 16 percent, excluding currency translation, and by 23 percent on a reported basis.
Company equipment divisions reported operating profit of $262 million for the quarter, compared with $198 million last year. The improvement was primarily due to increased shipments, efficiencies related to stronger production volumes, and improved price realization. Partially offsetting these factors were higher raw material costs. Excluding last year’s gain on the sale of a construction-equipment rental company, equipment operating profit rose 56 percent on a 21 percent increase in sales.
Deere’s asset-management efforts are continuing to yield positive results. Trade receivables and inventories at the end of the quarter were $5.934 billion, or 32 percent of previous 12-month sales, compared with $5.008 billion, or 36 percent of sales, a year ago.
Positive customer response is expected to continue driving the company’s performance in 2005, noted Lane. “We’re having success expanding our market position on a global basis,” he said. “Our strategy is on track to serve customers with products and services that deliver even greater value and productivity. Our efforts to grow a great business are proceeding as planned. As a result, we’re confident the company is positioned for another year of exceptional performance in 2005.”
Murdok | Breaking eBusiness News
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