Deere & Company Earnings Fall On Lower Sales

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On May 20, 2009, Deere & Company (DE Quote) reported that its Q2 FY09 earnings declined 38.1%, hurt by a fall in worldwide net sales and revenues, as well as volatility in foreign exchange rates. Net income slumped to $472.30 million or $1.11 per share from $763.50 million or $1.74 per share during Q2 FY08. Meanwhile, the latest quarterly earnings surpassed the most recent consensus estimate of $1.07 per share.

Total net sales and revenue declined 16.7% to $6.75 billion from $8.10 billion due to a slump in commercial and forestry equipment sales. Sales for the quarter and H1 FY09 included a 6.0% contribution to revenue growth from higher prices, which was offset by an unfavorable currency translation effect of 6.0%. Segment-wise, net sales from Equipment Operations decreased to $6.19 billion from $7.47 billion. Within this segment, agricultural equipment sales edged down 4.3% to $4.50 billion, largely due to lower shipment volumes, while commercial and consumer equipment sales plunged 23.5% to $1.10 billion, hurt by lower production volumes. Construction and Forestry sales plummeted 53.4% to $600.00 million, primarily due to higher raw material costs, partially offset by lower selling, administrative and general expenses. Additionally, finance and interest income fell 13.2% to $442.10 million, and other income remained relatively flat. ...