Printer Friendly

DEERE & COMPANY REPORTS RESULTS

 MOLINE, Ill., Aug. 24 /PRNewswire/ -- Deere & Company (NYSE: DE) today reported third quarter 1993 net income of $100.1 million or $1.31 per share, compared with net income of $9.1 million or $.12 per share in the third quarter of 1992. The third quarter of Deere & Company's fiscal year ended July 31.
 Worldwide net sales and revenues increased 17 percent to $2.049 billion in the third quarter of 1993 from $1.754 billion in the same quarter last year. Total worldwide production tonnage was up nine percent compared with the third quarter of 1992. Additionally, company and dealer inventories at the end of the quarter were $400 million lower than year-ago levels.
 Deere & Company Chairman and Chief Executive Officer Hans W. Becherer said, "In response to strong retail demand, the company has further increased North American agricultural equipment production schedules. Fiscal year 1993 worldwide production tonnage of all products is now scheduled to be about 10 percent higher than actual 1992 output, with worldwide agricultural equipment schedules now approximately eight percent higher than last year. Industrial equipment and lawn and grounds care equipment schedules remain at levels significantly higher than in 1992. Total production tonnage during the last quarter of 1993 is now scheduled to be substantially higher than last year's low level, when production was lower than sales as several manufacturing units were shut down to facilitate the reduction of company and dealer inventories.
 "Results for the quarter were significantly better than last year due to substantially improved North American equipment operations," Becherer said. "Our sales and production volumes were higher this year in response to increased retail demand, and price realization improved in all of our North American businesses as sales incentive cost levels continued to be significantly lower. Additionally, productivity continued to improve and our financial services subsidiaries' performance remained strong."
 Net sales and revenues include net sales to dealers of agricultural, industrial and lawn and grounds care equipment which were $1.727 billion in the quarter, an increase of 19 percent over third quarter 1992 sales of $1.449 billion. Net sales and revenues also include revenues of the company's credit, insurance and health care operations, which increased seven percent to $297 million in the third quarter compared with $277 million in the same quarter last year.
 Worldwide net income for the first nine months of 1993 totaled $102.7 million or $1.34 per share. Included in these results are second quarter 1993 restructuring charges of $80.0 million ($107.2 million before income taxes), relating to the downsizing and rationalizing of the company's European operations. Excluding the restructuring charges, net income was $182.7 million or $2.39 per share for the first three quarters of 1993 compared with $33.2 million or $.44 per share for the same period last year. Operating results for the first nine months of 1993 reflect significantly improved second and third quarter operating performance, which more than offset the loss in the normally weak first quarter.
 Worldwide production tonnage was five percent higher during the first nine months of 1993 compared with last year. Worldwide net sales and revenues were $5.578 billion for the initial nine months of 1993, a 10 percent increase over 1992 year-to-date net sales and revenues which totaled $5.065 billion. Net sales of equipment increased 12 percent during the first nine months of 1993 to $4.630 billion from $4.148 billion during the same period last year. The company's financial services revenues increased five percent to $873 million during the first three quarters this year compared with $832 million in the first nine months of 1992.
 "Retail sales of John Deere agricultural equipment in North America during the third quarter and first nine months of 1993 were significantly higher compared with the same periods last year, especially for our combines and new large tractors," Becherer said. "North American retail sales of both our lawn and grounds care equipment and industrial equipment also increased significantly in both the quarter and the first three quarters of 1993 compared with a year ago.
 "Industry retail sales of agricultural equipment in overseas markets in general remain relatively weak," Becherer said. "However, retail sales of John Deere agricultural equipment during the first nine months of 1993 were higher than in the same period last year, reflecting good acceptance of our new tractors and combines. Overseas retail sales of our lawn and grounds care products also have been higher this year."
 The company's worldwide equipment operations, which exclude the financial services subsidiaries, had net income of $55.8 million for the quarter compared with last year's third quarter loss of $33.1 million. Excluding the restructuring charges, these operations had net income of $55.7 million for the first three quarters of this year compared with a net loss of $73.6 million incurred during the same period of 1992. Significantly improved price realization, higher sales and production volumes, lower employment levels and enhanced efficiencies explain these improvements. After the restructuring charges, the equipment operations incurred a net loss of $24.3 million for the initial nine months of 1993.
 Net income in the third quarter of 1993 benefitted by $5.9 million after income taxes from the expected reduction of inventories valued on a last-in, first-out (LIFO) basis. There were no LIFO inventory benefits in the third quarter of 1992. Results in the first nine months of 1993 and 1992 reflected after-tax LIFO inventory benefits of $21.2 million and $22.1 million, respectively.
 Net income of the company's credit operations totaled $31.4 million in the third quarter of 1993 compared with $30.7 million in the same period last year. Year-to-date net income from these operations was $91.4 million in 1993 compared with net income of $80.8 million for the first three quarters of 1992.
 Net income from insurance and health care operations was $10.0 million in the third quarter of 1993 compared with $9.8 million last year. Net income for the first nine months of 1993 totaled $31.0 million compared with $22.0 million for the same period last year. Although third quarter insurance income was adversely affected by flood losses, year-to-date insurance results continue to reflect improved underwriting income compared with last year, which had higher loss experience, primarily in the first quarter. Health care operating results reflected very good improvement compared with the same periods of 1992.
 Operating profit of each of the North American equipment operations was favorably affected by improved price realization in the quarter and for the first nine months of 1993 compared with the same periods of 1992. Higher volumes and improved productivity have also enhanced North American equipment division results this year.
 Operating profit of the North American agricultural equipment division was significantly higher in the third quarter and first nine months of 1993 compared with the same periods last year.
 The company's North American industrial equipment business generated an operating profit in the third quarter of 1993 which was substantially higher than last year's modest third quarter operating profit, and had a small operating profit during the first nine months of 1993 compared with an operating loss during the same period last year.
 Compared with the same periods of 1992, our North American lawn and grounds care equipment division incurred a much smaller operating loss for the quarter and generated substantially higher operating income for the first three quarters of 1993.
 The overseas equipment operations generated a small operating profit in the third quarter of 1993 which was higher than last year's third quarter operating income. Excluding the restructuring charges, the overseas equipment operations incurred a small operating loss for the first nine months of 1993 compared with an operating profit earned during the same period last year. Low volumes, higher cost levels and unfavorable changes in currency relationships have adversely affected the company's overseas performance during the first nine months of 1993. These margin pressures are expected to continue. Operating profit is defined as income before interest expense, income taxes and certain other expenses.
 "Overall agricultural equipment retail sales in North America remain strong," Becherer said. "Although extremely wet conditions and flooding in the Midwest, and drought conditions mainly in parts of the South are affecting crop production and equipment sales, strong demand continues in areas experiencing good growing conditions. Ample to heavy rainfall in many areas, along with growth in the general economy, are positively affecting North American demand for our lawn and grounds care products. North American demand for John Deere industrial equipment is expected to benefit from increases in housing starts and higher public construction expenditures. Industry demand for agricultural equipment in overseas markets is expected to remain generally weak.
 "The outlook for our businesses for the remainder of this fiscal year and into 1994 is relatively positive," Becherer said. "Our new products continue to be well accepted and our competitive position worldwide remains very strong. As volumes have increased, operating margins are improving in response to our ongoing efforts to improve quality, reduce costs and enhance productivity."
 The following information is disclosed on behalf of the company's United States credit subsidiary, John Deere Capital Corp., in connection with the disclosure requirements of programs providing for the issuance of debt securities:
 John Deere Capital Corp.'s net income was $28.6 million in the third quarter of 1993 compared with $27.8 million in the same period last year. For the first nine months of 1993, net income was $82.9 million, compared with $72.2 million in the initial three quarters of 1992. Compared with last year, net income for the third quarter of 1993 was favorably affected by securitization and servicing fee income from retail notes previously sold and a lower provision for credit losses, which more than offset the effects of a lower volume of receivables and leases financed. Net income for the first nine months of 1993 benefitted from securitization and servicing fee income from retail notes previously sold, higher financing margins and lower credit losses, which more than offset the effects of a lower volume of receivables and leases financed.
 Revenues were lower in the third quarter and during the first nine months of 1993 compared with the same periods last year. Revenues have been affected by a smaller average portfolio financed this year and the lower level of interest rates and correspondingly lower finance charges earned by the company in 1993. The decrease in finance charges earned this year was partially offset by securitization and servicing fee income from retail notes previously sold. Additionally, borrowing costs have also been lower this year due to the lower interest rates and a smaller portfolio financed. Interest expense was down 11 percent in the third quarter and 13 percent for the first nine months of 1993 compared with the same periods in 1992. The average receivable and lease portfolio financed was approximately 12 percent lower in the third quarter and five percent lower during the first nine months of this year.
 Total receivable and lease acquisitions by the company increased seven percent during the quarter, and nine percent on a year-to-date basis compared with acquisitions in the same periods of 1992. The higher acquisitions during the first nine months of 1993 resulted from an increased volume of John Deere retail notes and leases, revolving charge accounts and wholesale receivables, which more than offset lower acquisitions of recreational product notes. Net credit receivables and leases financed by John Deere Capital Corp. were $3.710 billion at July 31, 1993, compared with $4.230 billion one year ago. The decline in the receivable and lease portfolio financed resulted mainly from the sale of retail notes. In the second quarter of 1993 and the fourth quarter of 1992, net proceeds of $560 million and $455 million, respectively, were received from the sale of securitized retail notes in the public market. Net credit receivables and leases administered, which include receivables previously securitized and sold, amounted to $4.670 billion at July 31, 1993, compared with $4.515 billion at July 31, 1992.
 DEERE & COMPANY
 Net Sales and Revenues
 (Millions of Dollars)
 Periods ended Three Months Percent Nine Months Percent
 July 31 1993 1992 Change 1993 1992 Change
 Net Sales:
 Agricultural equipment $1,091 $ 943 +16 $2,897 $2,751 +5
 Industrial equipment 396 313 +27 966 779 +24
 Lawn and grounds care
 equipment 240 193 +24 767 618 +24
 Total net sales 1,727 1,449 +19 4,630 4,148 +12
 Financial Services
 revenues 297 277 +7 873 832 +5
 Other revenues 25 28 -11 75 85 -12
 Total net sales
 and revenues $2,049 $1,754 +17 $5,578 $5,065 +10
 United States and Canada:
 Equipment net sales $1,291 $1,022 +26 $3,460 $2,983 +16
 Financial Services
 revenues 297 277 +7 873 832 +5
 Total 1,588 1,299 +22 4,333 3,815 +14
 Overseas net sales 436 427 +2 1,170 1,165
 Other revenues 25 28 -11 75 85 -12
 Total net sales
 and revenues $2,049 $1,754 +17 $5,578 $5,065 +10
 DEERE & COMPANY
 Selected Balance Sheet Data:
 (Millions Of Dollars)
 7/31/93 10/31/92 7/31/92
 Equipment Operations:
 Dealer accounts and notes
 receivable - net $2,848 $2,946 $3,135
 Inventories $ 610 $ 525 $ 723
 Financial Services:
 Credit receivables - net
 Financed $3,962 $4,315 $4,527
 Administered $4,922 $5,051 $4,811
 Insurance and health care
 companies' assets $1,310 $1,266 $1,245
 Actual Shares Outstanding 76,969,012 76,320,652 76,322,971
 -0- 8/24/93
 /CONTACT: Robert J. Combs of Deere & Company, 309-765-5014.
 (DE)


CO: Deere & Company ST: Illinois IN: MAC SU: ERN

SM -- NY020 -- 5374 08/24/93 10:08 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 24, 1993
Words:2300
Previous Article:MGM GRAND HOTEL SIGNS 5-YEAR CONTRACT WITH METROMEDIA COMMUNICATIONS FOR ESTIMATED $22 MILLION IN LONG DISTANCE TELEPHONE SERVICES
Next Article:NEWS COMMUNICATIONS NAMES FINKELSTEIN CHAIRMAN
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters