Outdoor power equipment maker Deere & Company reported net income of $712.3 million for the third quarter ended July 31, 2011, compared to $617.0 million for the same period last year.
For the first nine months of the year, net income was $2.130 billion compared to $1.408 billion in the first nine months of 2010.
Worldwide net sales and revenues increased 22%, to $8.372 billion, for the third quarter and were up 24% to $23.401 billion for the first nine months.
Deere Chairman and CEO Samuel R. Allen said the company was benefitting from stronger sales of large farm machinery and saw construction-equipment sales moving higher despite weakness in North American residential and commercial construction.
Net sales of the worldwide equipment operations increased 24% for the quarter and 27% for nine months compared with the previous year. Sales included a favorable currency-translation effect of 6% for the quarter and 4% for nine months and price increases of 3% for both periods.
Equipment net sales in the United States and Canada increased 10% for the quarter and 19% for the first nine months. Outside the U.S. and Canada, net sales were up 49% for the quarter and 40% for the nine months, with favorable currency-translation effects of 16% and 8%, respectively.
Deere's equipment operations reported operating profit of $969 million for the quarter and $2.883 billion for nine months, compared with $890 million and $2.193 billion last year. The increases were largely from higher shipment volumes and improved price realization, which were somewhat offset by higher raw-material costs and other increased selling expenses.
In addition to its Equipment Division, Deere operates a Financial Services business.
Company equipment sales are projected to be up about 25% for fiscal 2011 and up about 20% for the fourth quarter compared with the same periods a year ago. Included is a favorable currency-translation impact of about 4% for both periods. For the full year, net income is anticipated to be approximately $2.7 billion.
The new annual forecast now includes a negative impact of approximately $70 million in sales and $10 million in operating profit from the 2011 Japanese earthquake.
In the Equipment Division Performance, Agriculture & Turf segment sales increased 22% for the quarter and 23% for the first nine months of 2011 largely due to higher shipment volumes, the favorable effects of currency translation, and improved price realization. Operating profit was $859 million for the quarter and $2.579 billion year to date, compared with $824 million and $2.128 billion, respectively, in 2010. The improvement in both periods primarily was due to the impact of higher shipment volumes and improved price realization, partially offset by increases in raw-material costs and selling, administrative, and general expenses.
Deere expects worldwide sales of its agriculture and turf business to increase by about 21% for full-year 2011, with a favorable currency-translation impact of about 4%. This is due largely to the fact that farmers in the world's major markets are experiencing solid levels of income due to rising demand for agricultural commodities as well as high crop prices.
Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the same as in 2010.
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