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Researched by Industrial Info Resources (Sugar Land, Texas)--Deere & Company (NYSE:DE) (Moline, Illinois), a leading agricultural, construction and forestry equipment manufacturer, reported a decline in profits and revenues for fourth-quarter and full-year 2014. A weak global farming industry led to a drop in farm-machinery sales, as well as for other products, when compared with the record results of 2013. Net income was reported to be $649 million for the quarter, a 19.58% decrease from fourth-quarter 2013, and $3.16 billion for the year, a 10.6% decrease from fiscal 2013.
As part of its North American Industrial Manufacturing Project Database, Industrial Info is tracking several maintenance-related projects at Deere facilities across the U.S., including the semi-annual, fourth-quarter shutdowns at a haying & foraging equipment plant in Ottumwa, Iowa, and a grain drills plant in Ankeny, Iowa. The shutdowns are expected to last two weeks and one week, respectively, within December.
View Project Report - 300163246 300157018
Total revenues stood at $8.97 billion for the quarter, a 5.14% decrease from the same period last year, and $36.07 billion for the year, a 4.57% decrease from fiscal 2013. Equipment sales were down worldwide, particularly in the U.S. and Canada, where they fell 10% for the quarter and 8% for the year. The losses mostly were in the Agriculture & Turf segment, where shipment volumes were low and currency translation had a negative effect. The segment also lacked Deere's former landscapes and water businesses, which it sold off in the past year.
The Construction & Forestry segment, however, reported strong gains in sales and profits following higher shipment volumes and price realization.
Capital expenditures for the full fiscal year were reported to be $1 billion, slightly down from the earlier forecast of $1.1 billion.
"U.S. farm cash receipts, in spite of lower grain prices, remain at historically high levels, thanks to help from record livestock receipts," said Susan Karlix, the manager of Investor Communications for Deere, in a conference call. "As a result, our forecast calls for 2014 cash receipts to be about $413 billion, up about 1% from 2013, which would be the highest level ever recorded." Farm cash receipts represent income from the sale of agricultural commodities, plus government support and subsidies.
"Given the record grain yield of 2014 and lower commodity prices going forward, our forecast calls for cash receipts to be down about 5% in 2015."
Capital expenditures for fiscal 2015 are expected to dip to $875 million, while net income is expected to fall to $1.9 billion. Deere executives expect to see results in the Agriculture & Turf segment continue their decline due to weak conditions in the global farm economy; sales in the segment are forecast to drop 20%. However, the U.S. livestock sector may provide some relief, with sales for smaller-size equipment expected to increase. The Construction & Forestry segment is expected to see a 5% increase in sales, partly influenced by a growth in U.S. housing starts.
"Although the [agricultural] economy remains in a relatively healthy state, lower commodity prices and farm income are putting pressure on demand for farm equipment--especially larger models," Karlix said. "At the same time, conditions in the livestock sector are more positive, providing support to sales of mid- and smaller-size tractors. As a result, we expect industry sales in the U.S. and Canada to be down 25% to 30% for 2015."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
As part of its North American Industrial Manufacturing Project Database, Industrial Info is tracking several maintenance-related projects at Deere facilities across the U.S., including the semi-annual, fourth-quarter shutdowns at a haying & foraging equipment plant in Ottumwa, Iowa, and a grain drills plant in Ankeny, Iowa. The shutdowns are expected to last two weeks and one week, respectively, within December.
View Project Report - 300163246 300157018
Total revenues stood at $8.97 billion for the quarter, a 5.14% decrease from the same period last year, and $36.07 billion for the year, a 4.57% decrease from fiscal 2013. Equipment sales were down worldwide, particularly in the U.S. and Canada, where they fell 10% for the quarter and 8% for the year. The losses mostly were in the Agriculture & Turf segment, where shipment volumes were low and currency translation had a negative effect. The segment also lacked Deere's former landscapes and water businesses, which it sold off in the past year.
The Construction & Forestry segment, however, reported strong gains in sales and profits following higher shipment volumes and price realization.
Capital expenditures for the full fiscal year were reported to be $1 billion, slightly down from the earlier forecast of $1.1 billion.
"U.S. farm cash receipts, in spite of lower grain prices, remain at historically high levels, thanks to help from record livestock receipts," said Susan Karlix, the manager of Investor Communications for Deere, in a conference call. "As a result, our forecast calls for 2014 cash receipts to be about $413 billion, up about 1% from 2013, which would be the highest level ever recorded." Farm cash receipts represent income from the sale of agricultural commodities, plus government support and subsidies.
"Given the record grain yield of 2014 and lower commodity prices going forward, our forecast calls for cash receipts to be down about 5% in 2015."
Capital expenditures for fiscal 2015 are expected to dip to $875 million, while net income is expected to fall to $1.9 billion. Deere executives expect to see results in the Agriculture & Turf segment continue their decline due to weak conditions in the global farm economy; sales in the segment are forecast to drop 20%. However, the U.S. livestock sector may provide some relief, with sales for smaller-size equipment expected to increase. The Construction & Forestry segment is expected to see a 5% increase in sales, partly influenced by a growth in U.S. housing starts.
"Although the [agricultural] economy remains in a relatively healthy state, lower commodity prices and farm income are putting pressure on demand for farm equipment--especially larger models," Karlix said. "At the same time, conditions in the livestock sector are more positive, providing support to sales of mid- and smaller-size tractors. As a result, we expect industry sales in the U.S. and Canada to be down 25% to 30% for 2015."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
