Deere & Co. remained profitable despite steep drops in volume and profit for its fiscal fourth quarter ended Oct. 31. Net income was $351.2 million or $1.08 per share compared with $649.2 million, or $1.83 per share for the previous year’s fourth quarter, a 45.9-percent slide. Worldwide net sales and revenues plunged 25 percent to $6.715 billion for the fourth quarter.
For the full fiscal year 2015, net income was $1.94 billion compared to $3.16 billion in fiscal 2014, a 38.6 percent slide. Net sales dropped 20 percent to $28.86 billion for the full fiscal year.
“John Deere has completed a successful year in the face of further weakness in the global agricultural sector and a slowdown in construction equipment markets,” said Samuel Allen, chairman and CEO. “Sales and earnings for the year were the sixth-highest in company history, a notable achievement in light of the challenging market conditions we experienced. The company’s performance benefited from the adept execution of our business plans and disciplined cost management. As a result, Deere remains well-positioned to serve its customers while continuing to make investments in quality and innovation that are designed to drive growth in the future.”
Net sales of the worldwide equipment operations declined 26 percent for the quarter and 22 percent for the full year compared with the same periods in 2014. Sales included price realization of 1 percent for the quarter and full year.
Construction and forestry sales dropped 32 percent for the quarter and 9 percent for the year. Sales for both periods were lower mainly as a result of lower shipment volumes and the unfavorable effects of foreign currency exchange, partially offset by lower selling, administrative and general expenses. Full-year results declined because of lower shipment volumes, the unfavorable effects of foreign exchange, and higher production costs, partially offset by price realization and lower selling, administrative and general expenses.
Sales also dropped 25 percent in agriculture and turf in the fourth quarter and full year, with lower shipment volumes and unfavorable currency translation.
Going forward, Deere expects equipment sales to decrease about 7 percent for fiscal 2016 and to decline about 11 percent in the first quarter compared to a year ago. Deere expects a negative foreign currency translation effect of about 2 percent for the full year and 4 percent in the first quarter. For fiscal 2016, net income attributable to Deere & Co. is expected to be about $1.4 billion.
“Although our forecast calls for lower results in the year ahead, the outlook represents a level of performance that is considerably better than we have experienced in previous downturns,” added Allen. “This shows the continuing success of our efforts to establish a more durable business model and a wider range of revenue sources.”