Net Sales Drops 18 Percent in Deere’s Fiscal Second Quarter
Deere & Co. reported net income of $665.8 million for its fiscal second quarter ended May 3, 2020, or $2.11 per share compared with net income of $1.135 billion or $3.52 per share for the fiscal second quarter of 2019. For the first six months of the year, net income was $1.182 billion, or $3.73 per share, compared with $1.633 billion, or $5.07 per share for the first six months of fiscal 2019.
Worldwide net sales and revenues decreased 18 percent to $9.253 billion for the fiscal second quarter of 2020. For the first six months of the fiscal year, Deere declined 13 percent to $16.884 billion.
Net sales of the equipment operations were $8.224 billion for the quarter compared to $10.273 billion in the year-ago quarter, a 19.9-percent slide. For the first six months of the fiscal year, net sales of the equipment operations were $14.754 billion compared to $17.214 billion a year ago.
"John Deere's foremost priority in confronting the coronavirus crisis has been to safeguard the health and well-being of employees while fulfilling its obligation as an essential business serving customers throughout the world," said John C. May, chairman and CEO. "We've had good success in these areas thanks to the proactive measures we have taken to keep employees safe and our production facilities and parts distribution centers operational. At the same time, the company has reached out to our local communities to help those in need as a result of the pandemic. Deere and its employees have provided generous support to area food banks and other organizations offering assistance during this difficult time."
In addition to standard precautions in the equipment industry such as employee health screening, additional personal protective equipment, social distancing guidelines, enhanced cleaning and sanitation efforts, and staggered production schedules, Deere and its employees have taken actions to strengthen social safety nets in communities where the company operates throughout the world. These include making donations of face shields and coverings to health-care workers and first responders and contributing to local food banks and Red Cross chapters.
Significant actions also have been taken to strengthen the company's financial position. These include raising about $4.5 billion in medium- to long-term funding, aggressively reducing operating expenses, decreasing capital spending budgets, and other actions to preserve liquidity.
"Deere is well-known for developing strong relationships with a range of stakeholders, which prove extremely valuable in difficult times,” added May. “We remain committed to offering a full suite of advanced digital tools that give our customers unique capabilities and help them do their work more efficiently and profitably. As a result, we're confident the company will successfully manage the pandemic's effects and strengthen its position serving customers in the future."
Net sales in the construction and forestry division for the quarter was $2.256 billion compared to $2.291 billion in the year ago quarter, a 24.8-percent dive.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.