Agricultural machinery maker Deere & Co. (DE) reported a profit for the first-quarter of 2017 that declined 24 percent from the prior year, while total net sales and revenues for the quarter increased 2 percent. The company raised outlook for fiscal year 2017.
Both quarterly earnings per share and net sales topped analysts' expectations.
"Although the quarter's sales and earnings were somewhat lower than last year, all of our businesses remained solidly profitable. Deere's performance showed further benefits from the sound execution of its operating plans, the strength of a broad product portfolio and the impact of a more flexible cost structure. At the same time, we are seeing signs that after several years of steep declines key agricultural markets may be stabilizing," said Samuel R. Allen, chairman and chief executive officer.
Net income attributable to the company for the first-quarter declined about 24 percent to $193.8 million, from last year's 254.4 million, with earnings per share decreasing to $0.61 from $0.80 prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.54 per share for the quarter. Analysts' estimates typically exclude special items.
Worldwide net sales and revenues for the first quarter increased 2 percent, to $5.625 billion, compared with $5.525 billion last year. Net sales of the equipment operations were $4.698 billion for the quarter compared with $4.769 billion a year ago. Analysts expected revenue of $4.67 billion for the quarter.
Net sales of the worldwide equipment operations declined 1 percent for the quarter. Sales included price realization of 2 percent and a favorable currency-translation effect of 1 percent. Equipment net sales in the United States and Canada decreased 8 percent. Outside the U.S. and Canada, net sales increased 11 percent, with a favorable currency-translation effect of 1 percent.
Company equipment sales are projected to increase about 4 percent for fiscal 2017 and be up about 1 percent for the second quarter compared with the same periods of 2016. Foreign-currency rates are not expected to have a material translation effect on equipment sales for the year or second quarter.
Net sales and revenues are now projected to increase about 4 percent for fiscal 2017 with net income attributable to Deere & Company of about $1.5 billion. Previously, the company expected attributable net income of about $1.4 billion, while net sales and revenues were projected to decrease about 1 percent for fiscal year 2017. Wall Street currently is looking for fiscal year 2017 revenues of $23.29 billion.
by RTT Staff Writer
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