Officials with Dubuque County’s largest employer say they are weathering the current storm of weak market conditions going into the final stretch of the fiscal year.
Deere & Co. reported dips in both sales and net income from its recently completed quarter during an earnings call Thursday morning. The figures follow a slew of layoffs announced throughout Iowa and Illinois this year.
“Ag fundamentals remain muted, and market demand for construction in forestry has tempered alongside continued price competition, resulting in another quarter of overall challenging marketing conditions,” said Josh Rohleder, manager of investor communications, during the conference call.
The company reported net income of $1.73 billion for its third quarter, which ended July 28, compared to $2.98 billion for the same quarter last year. Net income is $5.86 billion for the first nine months of the year, compared to $7.8 billion for the same period last year.
The company’s net income for the full year remains forecasted to be about $7 billion.
The construction and forestry division, which includes John Deere Dubuque Works, had $3.24 billion in net sales during the quarter, down from $3.74 billion in the same quarter last year. Operating profits for the division were $448 million, also down from $716 million last year.
As part of the company’s plans to stay ahead of market fluctuations, Rohleder said officials are focused on adjusting schedules to have lower year-end field inventory levels to cope with changes in retail demand.
Despite the challenging market conditions that have resulted in sales decreases, Deere & Co. officials reported profit margins remain higher than expected.
Officials said the pullback on production helped maintain solid price realization, creating better margins.
John May, board chair and CEO, commended the company and its dealer network for a commitment to managing inventory and controlling costs.
“In this lower-volume environment, we’ve made challenging decisions that impact both our factories and our offices to ensure that our cost structure aligns with current market demand,” he said. “While these actions have been hard, and certainly not something we take lightly, they help us maintain our competitiveness throughout the business cycle, allowing us to continue investing in the products and solutions that empower our customers to address their unique challenges.”
He said that the company will continue reducing the inventory levels of used machinery in the North American large agriculture sector for the remainder of the fiscal year, which ends Oct. 31.
May said he is optimistic about the future of Deere & Co. and thanked employees for their commitment during a difficult time for the company.