Dubuque County’s largest employer saw a jump in net income in its recently completed quarter, as well as large increases for the division that includes John Deere Dubuque Works.
Deere & Co. reported a net income of $1.96 billion for the first quarter of its fiscal year, which ended Jan. 29. During the same period last fiscal year, that figure was $903 million.
“Deere completed its first quarter with solid execution,” said Rachel Bach, Deere & Co. manager of investor communications, during an earnings call with investors today. “While still far from normal levels, fewer supply chain disruptions allowed factories to operate at a high level of production.”
Net sales and revenues for the company totaled about $12.65 billion, up 32% from the same period last fiscal year.
The construction and forestry division, which includes the Dubuque plant, saw $3.2 billion in net sales during the quarter, an increase of 26% over the first quarter last fiscal year. The division also saw operating profits increase 130% from the same period last fiscal year, to $625 million.
While reporting that the construction and forestry division saw strong results in the most recent quarter, Bach noted the same quarter in the previous year was affected by lower production as officials worked on a labor agreement with union workers. Deere union workers went on strike for five weeks in late 2021 until they ratified a six-year contract with the company in November of that year.
Deere officials on today’s conference call reported that order books for products already are full through the fourth quarter of the year.
“Construction and forestry is also full into the fourth quarter,” said Brent Norwood, Deere director of investor relations. “Given the levels of demand, we do not anticipate any levels of inventory building in 2023.”
Norwood said inventory levels of completed machines have remained low due to ongoing supply chain issues, including in the construction and forestry division.
“Dealer inventory is at historic lows, and based on the retail demand and our production levels, we don’t expect any rebuilding in the stock until 2024,” he said.
Some supply chain challenges may persist into this year, as well, also affecting the ability to restock inventory, said Deere Chief Financial Officer Josh Jepsen.
“We had a good first quarter with strong results in the start of the year,” he said. “The supply chain is showing early signs of improving, but it remains fragile. But our teams are managing through it.”
In addition, Bach said the company is projecting a total net income for the current fiscal year of between $8.75 billion and $9.25 billion, which would be an increase over fiscal year 2022 at $7.13 billion.
“(The projection) reflects the results of the strong first quarter,” she said.