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Deere Posts Big Q4 and Full-Year 2010 Gains

Deere & Co. posted a 35-percent gain in net sales and revenue for its fiscal fourth quarter, with improvement in all divisions. Net income was $457.2 million for the quarter ended Oct. 31, or $1.07 per share, compared with a net loss of $222.8 million (53 cents per share) for the same period a year ago.

Fourth-quarter 2009 earnings were $99 million or 23 cents per share. For fiscal 2010, net income was $1.86 billion, or $4.35 per share, compared with $873.5 million or $2.06 per share, for fiscal 2009. Worldwide net sales and revenues for the fourth quarter increased 35 percent to $7.2 billion, and were up 13 percent to $26 billion for the full year. Net sales of the equipment operations were $6.56 billion for the quarter and $23.6 billion for full-year 2010, compared with $4.73 billion and $20.76 billion for the previous year.

“John Deere’s strong performance for the quarter and full year reflects a disciplined approach to executing our business plans and was achieved despite continuing weakness in certain regions and business sectors,” said Samuel Allen, chairman and CEO. “Although conditions continued to be positive in the U.S. farm sector, and included a highly favorable sales mix of larger equipment, European agricultural markets remained soft. Deere’s construction equipment sales benefited from somewhat-stronger overall demand, but remained far below normal levels.”

Allen said the company improved its competitive position by launching new products and expanding its market presence, especially in the developing world. During the quarter, Deere announced a combine-harvester factory and opened a joint venture production facility for construction equipment, both in India.

In North America, equipment net sales in the United States and Canada increased 41 percent for the quarter and 14 percent for the year. Outside the U.S. and Canada, net sales increased 36 percent for the quarter and 14 percent for the year.

The company expects equipment sales to rise 10 to 12 percent for fiscal 2011 and about 34 percent for the first quarter compared with the same periods for the previous year. The company said 2011 will be a year of record new-model introductions for the company, partly because of more rigorous global emission standards.

Construction and forestry sales leapt 75 percent for the quarter and 41 percent for the full year, resulting in operating profit of $54 million for the quarter and $119 million for the year, compared with last year’s operating profit of $2 million for the fourth quarter and an operating loss of $83 million for the full year. The company expects its construction and forestry equipment sales worldwide to increase 25 to 30 percent in the full year 2011. It expects sales to independent rental companies to grow in 2011.

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