For its third fiscal quarter, the world's largest maker of agriculture equipment earned $617 million, or $1.44 per share. That's a 47% improvement compared to last year's $420 million, or $0.99 a share. Revenue improved by 16% to $6.84 billion, with North America leading the way. The analysts had been expecting per-share earnings of $1.24.
The Equipment Division checked in with solid results. Agriculture and Turf sales were up 12% year over year, based on improved volumes and higher price realizations. Construction & Forestry managed a 59% sales hike, while its operating profit swung to $66 million, compared with a loss of $28 million for the same quarter a year ago.
Looking ahead, I reject the notion that I'm a Polyanna for maintaining a more positive assessment of Deere's prospects than most observers. Year over year, equipment sales are expected to increase by about 32% in in the fourth quarter, while guidance has net income coming in at about $375 million.
As Deere CEO Samuel R. Allen noted about his company, "John Deere remains well-positioned to help meet the world's growing need for agricultural commodities, shelter, and infrastructure. In our view, these developments hold exciting potential..."
Deere joined two of its most direct competitors, CNH Global
But don't get the idea that Deere has used up its opportunity for improvement. As Manager of Investor Relations Susan Karlix said on the call:
"The company is being helped by somewhat improved business conditions, but tailwinds are only part of the story ... What our results clearly show is the disciplined execution of our business plan, and our focus on serving customers with advanced products and services."
It appears to me that there remains lots of room for Deere to benefit from its solid approach to its business.