Deere and Company reported net income of $784.8 million for its fiscal fourth quarter ended Oct 28, or $2.42 per share, compared with net income of $510.3 million, or $1.57 per share, for the quarter ended Oct. 29, 2017, a 53.8-percent jump. For the full fiscal year 2018, Deere posted net income of $2.368 billion, or $7.24 per share, compared with $2.159 billion or $6.68 per share in fiscal 2017, a 9.7-percent rise.
Worldwide net sales and revenues increased 17 percent to $9.416 billion for the fourth quarter. For the full year, Deere posted net sales and revenues of $37.358 billion compared to $29.738 bill a year ago, a 25.6-percent hike.
“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,” said Samuel Allen, chairman and CEO. “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, which are being addressed through pricing actions and ongoing cost management.
“The company’s strong performance has allowed for significant investment in new products, services and technologies. In addition, the company in 2018 returned almost $1.8 billion to shareholders in higher dividends and the repurchase of over $900 million of stock. These steps reflect the strength of the company and our optimism about its future prospects.”
Net sales of the worldwide equipment operations increased 18 percent for the quarter and 29 percent for the full year compared to the same periods in 2017. Deere’s acquisition of the Wirtgen Group in December 2017 added 11 percent to net sales for the quarter and 12 percent for the year. Equipment net sales in the United States and Canada increased by 21 percent for the quarter and 25 percent for the year, with Wirtgen adding 4 percent for both periods. Outside of the U.S. and Canada, net sales rose 13 percent for the quarter and 34 percent for the year, with Wirtgen adding 19 percent and 22 percent for the respective periods.
Construction and forestry sales increased 65 percent for the quarter and 78 percent for the year, with Wirtgen adding 45 percent and 53 percent for the periods.
The company projects equipment sales will increase by about 7 percent for fiscal 2019 compared with 2018.
“Deere’s performance in 2018 provides further evidence of the company’s success executing its strategic initiatives, especially those focused on developing precision technologies and a wider range of revenue sources,” Allen said. “In our view, the company remains well-positioned to capitalize on growth in the world’s agricultural and construction equipment markets. “
Deere expects worldwide sales of construction and forestry equipment to be up about 15 percent in 2019, including a full year of Wirtgen sales, as opposed to 10 months in fiscal 2018. The outlook reflects continued growth in U.S. housing demand as well as transportation investment and economic growth worldwide. In forestry, global industry sales are expected to be up about 10 percent mainly as a result of improved demand throughout the world, led by the U.S.