Net income attributable to Deere & Company for fiscal 2015 – ended October 31- stood at $1.94bn (1.83bn), down from $3.16bn recorded in the previous year.
Worldwide net sales and revenues declined by 20% year-on-year to $28.86bn for the full year, while net sales in equipment operations fell from $32.96 to $25.78bn over the same period.
Go deeper with GlobalData
Equipment net sales in US and Canada decreased by 18% year-on-year during the fiscal 2015, while outside these two countries net sales fell by 28%.
The company attributed the decline in earnings and sales to a weakness in global markets for farm and construction equipment.
Deere’s equipment operations reported operating profit of $2.18bn for the full year, compared to $4.3bn in 2014.
Samuel R. Allen, chairman and chief executive officer at Deere & Company said: "John Deere has completed a successful year in the face of further weakness in the global agricultural sector and a slowdown in construction-equipment markets. Sales and earnings for the year were the sixth-highest in company history, a notable achievement in light of the challenging market conditions we experienced.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData"The company’s performance benefited from the adept execution of our business plans and disciplined cost management. As a result, Deere remains well-positioned to serve its customers while continuing to make investments in quality and innovation that are designed to drive growth in the future."
…but Deere’s financial services income rises
Financial services reported net income attributable to Deere & Company of $153m for the fourth quarter of its fiscal year and $632.9m for the full year, compared with $172.2m and $624.5 million in 2014.
The company said that lower results for the quarter were primarily due to the unfavourable effects of foreign-currency exchange translation, and higher losses on residual values primarily for construction-equipment operating leases, partially offset by lower selling, administrative and general expenses.
"Results for the year improved due to growth in the average credit portfolio, the previously announced crop insurance sale and higher crop insurance margins experienced prior to divestiture, and lower selling, administrative and general expenses. These factors were partially offset by the unfavourable effects of foreign-currency exchange translation, less-favourable financing spreads, and higher losses on residual values primarily for construction-equipment operating leases," the company wrote.
On the other hand, the company’s financial services subsidiary, John Deere Capital Corporation (JDCC) saw its earnings drop year-on-year from $544.2m to $498.2m at the end of the fiscal 2015.
Net receivables and leases financed by JDCC were $32.59bn and $32.98bn at October 31, 2015 and 2014, respectively.
Company outlook
The company projected a 7% year-on–year decrease in equipment sales for fiscal 2016 and an 11% year-on-year fall for Q1 2016.
Included in the forecast is a negative foreign-currency translation effect of about 2 percent for the full year and 4 percent for the first quarter.
For fiscal 2016, net income attributable to Deere & Company is anticipated to be around $1.4bn.
