785 million net income for the fourth quarter and 2.368 billion for the year in 2018
Deere & Company reported net income of $ 785 million for the fourth quarter ended October 28, 2018. An increase from the net income of $510.3 million for the same period in 2017. For fiscal 2018, net income attributable to Deere & Company was $2.368 billion, an increase from $2.159 billion in 2017.
Worldwide net sales and revenues increased 17 percent, to $9.416 billion, for the fourth quarter and rose 26 percent, to $37.358 billion, for the full year. Net sales of the equipment operations were $8.343 billion for the quarter and $33.351 billion for the year, compared with respective totals of $7.094 billion and $25.885 billion in 2017.
These numbers are clearly speaking for themselves, but also Samuel Allen, chairman and chief executive officer at Deere & Company, said: «John Deere has concluded another solid year in which the company benefited from a further improvement in market conditions and a favorable customer response to its lineup of advanced products. In the fourth quarter, farm machinery sales in the Americas made further gains while construction-equipment sales continued to move higher, helped in part by our Wirtgen road-building business, whose financial contribution has exceeded our original forecasts. At the same time, the company has continued to face cost pressures for raw materials such as steel, an answer will come through pricing actions and ongoing cost management».
Equipment division performances
- Agriculture & Turf. Sales rose 3 percent for the quarter and 15 percent for the year due to higher shipment volumes and price realization. Additionally, full-year results benefited from lower warranty claims. Operating profit was $567 million for the quarter and $2.816 billion for the year, compared with respective totals of $594 million and $2.513 billion in 2017. Results for the quarter saw the influence of higher production costs, unfavorable effects of foreign-currency exchange and higher research and development costs, partially offset by higher shipment volumes and price realization.
- Construction & Forestry. Construction and forestry sales increased 65 percent for the quarter and 78 percent for the year, with Wirtgen (aquired by Deere in December 2017) adding 45 percent and 53 percent for the periods. Results for both periods saw higher shipment volumes and lower warranty-related claims. The quarter’s results also benefited from price realization. Operating profit was $295 million for the quarter and $868 million for the full year, compared with $86 million and $346 million in 2017. Wirtgen contributed operating profit of $79 million for the quarter and $116 million for the full year. Excluding Wirtgen, the improvements came from higher shipment volumes and lower warranty expenses, partially offset by higher production costs. Additionally, the respective periods of 2017 included an impairment charge for international operations.
Few predictions for 2019
The projection of the company talk about a 7 percent increase for fiscal 2019 compared with 2018. One important difference will be a full year of Wirtgen sales in 2019 instead of only 10 months in 2018. Predictions on foreign-currency rates say that they’ll have an unfavorable translation effect on equipment sales of about 2 percent for the year.
Moreover, predictions on the net income attributable to Deere & Company forecast it will be about $3.6 billion.