Just as the U.S.D.A. reports a record corn harvest for Iowa producers, Quad Cities-based Deere and Company reports a huge boost in earnings for the fourth quarter, thanks in large part to agricultural equipment sales.
Bill Ratzburg, Deere’s investor relations director, headed up today’s earnings report, carried live on the Internet.
“This morning, Deere reported record fourth quarter net income of 422-million dollars on record fourth quarter equipment operations net sales of 5.4 billion dollars,” Ratzburg says, “on a continuing operations basis, income increased 53% and diluted earnings per share rose 57%.” The company announced a two-for-one stock split last week and he says the per share results don’t reflect that split.
Looking ahead, Ratzburg says Deere’s leaders are very optimistic about the agricultural market and the company’s prospects. Ratzburg says: “For the first quarter of 2008, we expect company-wide equipment operations net sales to be up about 25%, with ag contributing the bulk of that increase and with sales from Lesco basically accounting for the rest. Net income is expected to be about 325-million dollars for the quarter.”
Iowa is the nation’s leader in the production of both corn and ethanol, with further gains expected in the year ahead. Ratzburg says Deere reaped benefits from an upturn in the global farm economy. “We now expect about two-point-nine billion bushels of this year’s U.S. corn crop to be used in ethanol production,” Ratzburg says, “this is a modest decline from our previous expectation but still a significant increase over last year’s level. As a result, our outlook for industry sales of agricultural equipment in the U.S. and Canada is up ten to 15-percent from 2007.”
Deere expects earnings next year to hit two-point-one billion dollars with 325-million in profits during the first quarter. Meanwhile, the latest U.S.D.A. crop report shows Iowa corn producers harvested a record 2.4 billion bushels this year from another record of nearly 14-million acres.