Deere reports strong fourth quarter, fiscal year

Dubuque County’s largest employer reported a strong end to its fiscal year, including for the division that includes John Deere Dubuque Works.

Deere & Co. reported net income of $2.25 billion for the fourth quarter of its fiscal year, which ended Oct. 30. That marks a 75% increase from the same period last year, when net income was $1.28 billion.

Net income for the entirety of fiscal year 2022 was $7.13 billion, up 20% from the $5.96 billion recorded in the previous fiscal year.

“Fiscal year 2022 was another unprecedented year in a number of ways,” said CEO John May during an earnings call with investors Wednesday. “… It proves what we knew all along, that we have the best factory teams in the industry.”

For the whole fiscal year, net sales and revenues for Deere & Co. totaled $52.58 billion, up 19% from fiscal year 2021.

The construction and forestry division, which includes John Deere Dubuque Works, reported an operating profit of $414 million in the fourth quarter, a 53% increase compared to the same time period last year. For the full fiscal year, the division saw an operating profit of $2.01 billion, an increase of 35% compared to the previous fiscal year.

The division also saw quarterly net sales of $3.37 billion, a 20% increase from the past year’s fourth quarter. For all of fiscal year 2022, the division’s net sales reached $12.53 billion, an increase of 10% from the previous fiscal year.

“Construction and forestry markets also continued to benefit from solid demand, which contributed to its strong performance in the fourth quarter,” Rachel Bach, Deere & Co. manager of investor communications, said on the call.

Deere officials cited several challenges that impacted the fiscal year overall, one of the most pressing being supply chain issues.

“At times, our deliveries were delayed as demand simply outstripped what the industry could supply,” May said.

The first quarter of fiscal year 2022 also was impacted by a five-week strike, which ended in November 2021 with union members ratifying a new six-year agreement with the company.

Still, Brent Norwood, Deere director of investor relations, said production levels were up this past fiscal year. The company made progress in the latter half of the year on the level of partially completed machines in inventory due to supply challenges.

“(The second quarter) was really where we saw that figure peak,” Norwood said. “That level (of partially completed machines) is running at a much more normalized level now.”

Deere & Co. officials said order books are already filled into the third quarter of fiscal year 2023.

The company also forecasts a net income of $8 billion to $8.5 billion for the entire fiscal year 2023, which would mark an increase of at least 12% over fiscal year 2022 if the projection is met.

“I truly believe our best years are still ahead of us,” May said.