By Dave Sebastian
Deere & Co. said profit rose for the latest quarter despite revenue falling, and said it expects higher earnings in the current fiscal year amid improving farm economy conditions and stabilization in the construction and forestry markets.
The Moline, Ill., maker of agricultural, lawn-care and construction equipment Wednesday posted a fourth-quarter profit of $757 million, or $2.39 a share, compared with $722 million, or $2.27 a share, in the comparable period last year.
Net sales and revenues fell 2% to $9.73 billion. Construction and forestry sales fell 16%, equipment-operations sales fell 1% and agriculture and turf sales rose 8% Financial services net income more than doubled to $186 million.
Costs and expenses fell to $8.62 billion from $9.07 billion, though impairment charges and employee-separation costs of $211 million and $458 million after tax, respectively, weighed on results.
The company expects fiscal 2021 net income of $3.6 billion to $4 billion. It posted fiscal 2020 net income of $2.75 billion, better than the $2.25 billion it expected in August.
"Higher crop prices and improved fundamentals are leading to renewed optimism in the agricultural sector and improving demand for farm equipment," Chairman and Chief Executive John May said.
Deere said it sees fiscal 2021 agriculture and turf sales rising 10% to 15%, and construction and forestry sales rising 5% to 10% due to expected recovery from the Covid-19 pandemic and benefits from residential building activity. It sees full-year net income for its financial-services segment of about $630 million, with expected benefits from favorable financing spreads, lower losses on operating-lease residual values and income earned on a higher average portfolio.
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(END) Dow Jones Newswires