The largest employer in Dubuque County on Friday highlighted strong first-quarter results and presented a positive outlook for the remainder of its fiscal year.
Deere & Co. reported first-quarter sales of nearly $2.47 billion in its construction and forestry division, which includes John Deere Dubuque Works. That represented a 21% increase compared to the same quarter last fiscal year.
Operating profit for the fiscal year’s opening quarter, which ended Jan. 31, was $268 million. That represents a 188% increase compared with the same, three-month stretch in the prior fiscal year.
Top company officials reflected on the results in a conference call Friday morning.
“Our (construction and forestry) business has benefited from a very strong housing market, a modest recovery in the oil and gas sector and the industry’s proactive inventory management,” said Ryan Campbell, senior vice president and chief financial officer for Deere & Co.
Deere officials also presented a positive outlook for the fiscal year as a whole, projecting sales of $10.5 billion to $11 billion in the construction and forestry division. If these benchmarks are achieved, it would represent at least an 18% increase compared to the $8.9 billion in sales the division saw in the last fiscal year.
Manager of Investor Communications Brent Norwood provided a more in-depth analysis of how various parts of that division should perform.
“North American construction equipment industry sales are now forecast to be up about 5%, while sales of compact construction equipment are expected to be up about 10%,” he said. “… In forestry, we now expect the industry to be up between 5% to 10%.”
Overall, Deere & Co. reported net sales of $9.1 billion in the first quarter, up 19% from the $7.6 billion in sales reported during the same quarter the previous year. Net income companywide topped $1.2 billion, an increase of 137% compared to the first quarter of 2020.
The solid first-quarter results, and positive overall outlook, came on the heels of a challenging year for Deere & Co.
In fiscal year 2020, the company’s construction and forestry division reported a 20% decline in net sales and a 51% drop in operating profit compared to the prior year.
As a whole, Deere & Co. net sales were $35.5 billion in fiscal year 2020, down about 9% compared to the previous fiscal year. Net income was about $2.8 billion, which represented a slide of 15% compared to the previous fiscal year.