Deere & Company recently reported worldwide net income of $71.8 million, or $0.30 per share, for the third quarter ended July 31, and $256.1 million, or $1.08 per share, for the first nine months of 2001. This compares with net income of $172.4 million, or $0.72 per share, and $414.4 million, or $1.75 per share, for the comparable periods
last year.
"Deere’s third-quarter results continued to reflect the general economic slowdown and low farm commodity prices," said Robert W. Lane, chairman and chief executive officer. "Although we are pleased to have remained profitable in the face of such difficult conditions, we are continuing to take aggressive actions to further strengthen our competitiveness and drive more efficient asset levels." These steps -- which include additional production cutbacks and an early-retirement program previously announced -- are expected to have an adverse impact on fourth-quarter financial results, he noted.
Worldwide net sales and revenues were $3.584 billion for the third quarter and $10.041 billion for the first nine months of 2001, compared with $3.632 billion and $9.761 billion, respectively, last year. Net sales were $3.037 billion for the third quarter and $8.384 billion for nine months compared with $3.122 billion and $8.326 billion a year ago. Excluding acquisitions, both the quarter and year-to-date periods were negatively affected by lower sales of commercial and consumer equipment and of construction and forestry equipment. Sales for both periods were also hurt by the stronger U.S. dollar. Partially offsetting these factors was the impact of acquisitions and higher agricultural-equipment sales for the nine-month period. Excluding acquisitions, net sales decreased 6 percent for the quarter and 3 percent year to date compared with last year. Overseas sales were 6 percent lower for the quarter and 1 percent higher for the nine months. Excluding the impact of the stronger U.S. dollar, overseas sales were flat for the quarter and up 8 percent year to date. Overall, the company’s physical volume of sales decreased 3 percent for the quarter but was 2 percent higher for the first nine months.
Worldwide equipment operations had net income of $30.6 million for the quarter and $123.7 million for the first nine months of 2001, compared with $117.5 million and $277.8 million, respectively, last year. The decreases were primarily due to lower sales and production volumes of both the commercial and consumer equipment and the construction and forestry equipment divisions, excluding acquisitions, as well as lower production and sales of large agricultural tractors during the third quarter. In addition, a planned increase in research and development expense as well as start-up costs for the introduction of new products, and higher interest expense, had a negative effect on the year’s results. A slightly higher annual effective tax rate also had an adverse impact on the quarter. Partially offsetting these factors were lower pension and post-retirement benefit costs and lower selling and administrative expenses net of acquisitions. Worldwide equipment operating profit, which excludes interest expense, taxes and certain other corporate expenses, was $128 million for the quarter and $413 million for nine months, vs. respective year-ago totals of $249 million and $610 million. The decreases were primarily due to the operating factors mentioned above in addition to lower results from unconsolidated subsidiaries.
