Deere & Company reported third-quarter net income of $1.379 billion on Thursday, marking the company’s first profit gain on a year-over-year basis in roughly three years, with strength in construction equipment demand making up for an ongoing weakness in large farm machinery.
Earnings came in at $5.10 per diluted share for the three months ended Aug. 2, up from $4.75 per share in the same quarter a year ago
Total net sales and revenues rose 5% to $12.61 billion, with net sales of $10.999 billion compared with $10.357 billion a year earlier. The construction and forestry segment drove the quarter’s results. Net sales climbed 18% to $3.62 billion, while operating profit surged 84% to $436 million, with the operating margin expanding to 12.1% from 7.7% a year ago, the company said.
The small agriculture and turf segment also contributed, posting a 12% revenue gain to $3.38 billion and a 28% increase in operating profit to $622 million. Those gains offset ongoing weakness in production and precision agriculture, the company’s largest segment, where net sales slipped 6% to $3.998 billion and operating profit fell 9% to $527 million; Deere attributed the decline to reduced shipment volumes. Deere raised the low end of its full-year net income guidance to $4.75 billion from $4.5 billion, leaving the top end at $5 billion.