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Deere reaps bumper 3Q
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August 18, 1998: 12:36 p.m. ET
Agricultural equipment manufacturer says period's earnings were a record
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NEW YORK (CNNfn) - Drought has sapped the yield of many crops this year, but Deere & Co. Tuesday posted record fiscal third-quarter net income, a big harvest for the agricultural and construction equipment maker.
For the quarter ended July 31, the Moline, Ill.-based company reported its net income rose to $290.8 million, or $1.20 per share, from $252.7 million, or $1.00 per share, a year earlier.
The results represent a 15 percent increase in net income and a 20 percent jump in earnings per share from the year-earlier period.
Deere's third-quarter earnings-per-share also beat the First Call consensus analyst estimate by a penny.
Deere said its per-share earnings benefited from the company's stock buyback program and that revenue growth was driven by continued product demand, cost reductions and quality initiatives.
Worldwide net sales and revenue jumped 8 percent to $3.693 billion for the quarter from $3.430 billion a year earlier.
"Third-quarter profits reflected positive contributions from all business segments and remained at record levels despite continued expenditures for new products, growth opportunities and increasingly challenging agricultural market conditions," said Chairman and Chief Executive Officer Hans W. Becherer.
For the nine-months ended July 31, Deere earned $859.3 million, or $3.49 per share, an increase of 15 percent in net income and 19 percent in earnings per share, compared with last year's $748.8 million, or $2.94 per share.
Worldwide net sales and revenue jumped 14 percent to $10.609 billion from $9.347 billion.
Deere expects retail demand for its agricultural equipment to decline for the rest of 1998 and 1999 because of lower farm commodity prices, resulting from fears of Asia's economic crisis and the prospects for increased global supplies of grains and oilseeds.
Regarding construction equipment, Deere said that while low interest rates and generally favorable economic conditions have strengthened demand, fourth-quarter production volume will decline with the introduction of a new product-distribution system designed to more closely align production to retail demand.
By late morning, Deere's stock (DE) was trading at 42-9/16, up 1-1/4. 
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Deere & Company
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