Buoyed in part by rising grain prices, Quad Cities-based farm equipment maker Deere and Company is reporting a modest upturn in profits for its first quarter, which ended January 31st. Tony Huegel, Deere’s manager of investor communications, ran down the numbers during a webcast this morning from the headquarters in Moline, Illinois.
Huegel says Deere reported first-quarter net income of 239-million dollars on equipment operations net sales of three-point-eight billion. That’s a one-percent increase in income and a five-percent increase in earnings per share versus the first quarter of last year. He says the company’s revenue rose five-percent during the quarter to four-point-four billion dollars.
Huegel says first quarter worldwide equipment sales were up three-percent compared to the prior year’s first quarter. He says construction equipment sales were down by three-percent in the U.S. and Canada but that was offset by an increase of 24-percent in sales elsewhere. Huegel says projections for the months ahead are optimistic.
He says "For the second quarter 2007, we expect companywide net equipment sales to be up about five-percent with net income of 525 to 550-million dollars. For the year, we are now forecasting net equipment sales to be up slightly, compared with fiscal year 2006 versus our previous guide of roughly flat." Huegel says prices for key Midwestern commodities like corn and soybeans have continued to rise steadily in recent months, and that’s caused Deere to shift its own projections for farm equipment sales.
He says "Our outlook for industry sales of agricultural equipment in the U-S and Canada is now flat-to-up five-percent for fiscal year 2007 versus fiscal year 2006. We’re seeing strength in large tractors, combines, planters and tillage equipment being offset somewhat by weakness in cotton, small tractors and some livestock-related equipment."
In a release, Deere CEO Robert Lane said: "As a result of our efforts to build a more agile company, Deere is better able to align production with shifts in the retail marketplace. This success puts the company in a stronger position to serve a growing customer base worldwide. In conjunction with increasing demand for renewable fuels and other positive global economic factors, it also strengthens our ability to deliver strong financial results."