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MOLINE, Ill — Deere & Company reported net income of $1.884 billion for the third quarter ended July 31, 2022, or $6.16 per share, compared with net income of $1.667 billion, or $5.32 per share, for the quarter ended August 1, 2021. For the first nine months of the year, net income attributable to Deere & Company was $4.885 billion, or $15.88 per share, compared with $4.680 billion, or $14.86 per share, for the same period last year.
Net sales and revenues increased 22 percent, to $14.102 billion, for the third quarter of 2022 and rose 13 percent, to $37.041 billion, for nine months. Net sales were $13.000 billion for the quarter and $33.565 billion for nine months, compared with $10.413 billion and $29.461 billion last year.
“We’re proud of the extraordinary efforts by our employees to increase factory output and get products to customers under challenging circumstances,” said John C. May, chairman and chief executive officer. “At the same time, our results reflected higher costs and production inefficiencies driven by the difficult supply-chain situation.”
Net income attributable to Deere & Company for fiscal 2022 is forecast to be in a range of $7.0 billion to $7.2 billion.
“Looking ahead, we believe favorable conditions will continue into 2023 based on the strong response we have experienced to early-order programs,” said May. “We are working closely with our factories and suppliers to meet higher levels of customer demand next year. Additionally, we are confident the company’s smart industrial strategy and leap ambitions will continue unlocking new value for customers through Deere’s advanced technologies and solutions.”
Like most manufacturers, Deere has struggled to secure parts and raw materials, stalling production of equipment and leading to a sales goal miss in the second quarter of 2022, according to Reuters. Ken Wagner, owner of Deere dealer Heritage Tractor, says he’s seen quite a few cancellations of machine orders because Deere couldn’t produce them.
“Some of the products are not going to be made in the quantities that we want,” Wagner says.
Deere company executives told shareholders that supply chain disruptions will last through the year.
Production and precision agriculture sales increased for the quarter due to higher shipment volumes and price realization, partially offset by the unfavorable impact of currency translation. Operating profit rose primarily due to price realization and higher shipment volumes / sales mix. These items were partially offset by higher production costs, higher selling, administrative, and general expenses, increased research and development expenses, and the unfavorable effects of foreign currency exchange.
Eric Greaser, senior analyst at Moody’s, told Reuters that analysts are predicting a 36% year over year increase in revenue for Deere’s precision agriculture segment — indicating Deere’s bet on precision is paying off.
“Pricing has been fantastic, and that can lead to very strong earnings for Deere,” Greaser says.
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