MOLINE, Ill. — What a difference a year makes.
Deere & Co. posted its third consecutive quarter of earnings increases and the fifth-best year for sales and earnings in the company’s 180-year history, the company announced Wednesday.
For fiscal year 2017, the company posted earnings of $2.159 billion, or $6.68 per share, compared with $1.524 billion, or $4.81 per share in 2016, nearly a 42 percent earnings increase for the year. Just a year ago, the company had seen 11 consecutive quarters of earnings declines, and year-end earnings were the lowest in seven years.
For its fourth quarter, which ended Oct. 30, Deere recorded quarterly earnings of $510.3 million, or $1.57 per share, compared with $285.3 million, or 90 cents per share, for the same quarter a year ago, a 79 percent increase. It was also the fifth best fourth-quarter earnings performance in company history.
“John Deere has completed another successful year as markets for farm and construction equipment showed improvement and our actions to build a more durable business model yielded strong results,” said Samuel R. Allen, chairman and chief executive officer, adding that the year’s sales and earnings were the fifth-highest in company history. “We saw higher overall demand for our products with farm machinery sales in South America making especially strong gains and construction equipment sales rising sharply.”
Worldwide net sales and revenues increased 23 percent, to $8.018 billion, for the fourth quarter and increased 12 percent, to $29.738 billion, for the full year. Net sales of the equipment operations were $7.094 billion for the quarter and $25.885 billion for the year, compared with respective totals of $5.650 billion and $23.387 billion in 2016.
Ag and turf division sales increased 22 percent for the quarter and 9 percent for the fiscal year. Sales of construction and forestry equipment jumped 37 percent for the quarter and 17 percent for the year after sustaining an operating loss in the fourth quarter of 2016.
Deere is projecting its ag and turf equipment sales will increase 9 percent worldwide for fiscal 2018, with ag equipment sales in the U.S. and Canada up 5 to 10 per cent for the year.
“What you’re seeing right now is replacement of equipment, especially large equipment,” Deere spokesman Ken Golden said, including the large row-crop tractors made in Waterloo. “We’re experiencing low commodity prices and yet we’re seeing sales for the year being the fifth-highest in company history. Entering into this year, we were projecting to be down 1 percent in equipment sales and we’re up 11 percent. We’re definitely seeing improvement in farm and construction.”
Additionally, Golden said, the company’s early orders for large tractors heading in to 2018 look promising. “That’s a big thing for places like Waterloo that build large equipment,” Golden said, and it supports company projections now of an even better performance in 2018, with projected earnings of $2.6 billion.
As of the first week of November, Golden said, less than two dozen employees in the Deere Waterloo Works were on layoff — a far cry from the nearly, 1,000 workers here idled in a pair of layoffs in late 2014 and early 2015.
Overall company equipment sales are projected to increase 22 percent for fiscal 2018 and 38 percent for that year’s first quarter compared with the same periods in 2017.
“It’s a great market, but it’s also the business plan, which is to grow geographically in product lines and control costs. That adds up over time to a profitable company that benefits our employees,” Golden said. “If we can run the company well, expand well, all employees benefit.”
Deere’s earnings performance beat analysts’ estimates of about $1.46 per share for the quarter and $6.60 for the year.