GAAP net income was $899 million,
or $2.81 per share, compared to $910 million, or $2.78 per share, last year.
Adjusted net income increased 2% to $867 million, or $2.71 per share, but
missed forecasts of $2.86 per share.
Sales in Equipment Operations dropped
3% to $8.9 billion. Sales in Agriculture & Turf fell 6% to $5.9 billion due
to lower shipment volumes and the unfavorable effects of currency translation. Construction
& Forestry sales inched up 1% to $3 billion mainly due to price
realization.
Financial Services posted a 16%
increase in net income to $175 million, driven by income earned on a higher
average portfolio and favorable adjustments to income tax provisions.
For fiscal year 2019, net sales and
revenues are projected to increase about 5%. Net income attributable to Deere
& Company is forecast to be about $3.2 billion. Company equipment
sales are expected to increase by about 4%.
Net sales are expected to increase 2% in Agriculture & Turf and 10% in Construction & Forestry. The forecast for Construction & Forestry includes a full year of Wirtgen sales versus 10 months last year, with the two additional months adding about 4% to division sales.
Deere & Company expects industry sales of agricultural
equipment to remain the same as last year for the US and Canada as well as for
the EU28-member nations. Industry sales of tractors and combines in
South America are projected to be flat to up 5% benefiting from strength in
Brazil. Sales in Asia are forecast to be flat to down slightly.
Industry sales of turf and utility equipment in the US and
Canada are expected to be flat to up 5% for 2019. In forestry, global industry
sales are expected to be flat to up 5% mainly due to improved demand in EU28
countries and Russia.
The Financial Services division is expected to benefit from a higher average portfolio and favorable adjustments to income tax provisions, largely offset by less-favorable financing spreads, higher losses on operating-lease residual values, and a higher provision for credit losses.
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