Deere & Company worldwide net sales and revenues increased 23% to US$6.913 billion for the first quarter of 2018, which ended January 28. Higher shipment volumes and favourable effects of currency translation saw the firm’s agriculture and grounds care equipment sales climb 18% for the three-month period, and operating profit was US$387 million (US$218 million same three months a year ago).
The quarter’s improvement was driven mainly by higher shipment volumes and lower warranty costs, partially offset by higher production costs. “Deere has continued to experience strong increases in demand for its products as conditions in key markets show further improvement,” said Samuel R. Allen, chairman and CEO. “Sales gains for the quarter, however, were moderated by bottlenecks in the supply chain and logistical delays in shipping products to our dealers.” Despite the positive mood, new US tax reform legislation saw Deere & Company report a net loss of US$535.1 million for the quarter.
Looking ahead, Deere’s worldwide sales of agriculture and grounds care equipment are forecast to increase by about 15% this year. Higher demand for large equipment is expected to see industry sales for agricultural equipment in the US and Canada rise by around 10%, and improving conditions in the dairy and livestock sectors could see full-year industry sales rise by around 5% in the EU28.