Deere & Company’s fiscal first quarter earnings have increased, thanks to robust heavy equipment sales. Net income for Iowa’s largest manufacturing employer totaled $681 million. That’s up 4.8 percent from a year ago.
Agricultural and construction segments reported higher sales worldwide. Earnings per share were $1.81 – up from $1.65 a year ago. Worldwide net sales and revenues rose 3 percent to nearly $7.7 billion. The chairman and CEO of the Moline, Illinois-based company says it’s doing a good job of cost management, but predicts product demand will slow the rest of the year.
Deere spokesman, Ken Golden, says Deere factories in the U.S. will begin the installation this year of new engines with improved technology, to comply with new emissions standards. Golden says that requires the manufacturing line to change, not only the way the line is supplied, but also the way they build the machinery and that will lead to a drop in the production of large equipment.
He says employees at John Deere Harvester Works in East Moline are already making the switch. The company also expects ag equipment demand to drop this year, because farm income is projected to decline from last year’s record high. Golden says Deere now predicts farm equipment sales will decline 6 percent in the second quarter, and three percent for the year, but other areas should make up some of the difference.
Golden says the company believes it will see an increase in, turf and utility and construction and forestry equipment sales. “So that sort of offsets, it doesn’t offset it completely, it does offset it somewhat,” he says. Deere and Company has not changed its profit projection for the year. It still expects to earn $3.3 billion.
(Reporting by Phil Roberts, Davenport)