News John Deere
European sales boost Deere profits
Machine manufacturer John Deere has had a good third quarter. During this period, the profit achieved rose to $910 million, which is converted to more than €790 million. The sale of machines increased by 36%, partly because more (harvesting) machines and tractors were sold in Europe.
During the second financial quarter Deere & Company had a turnover of €558 million, but that amount has grown considerably in the past 3 months. For the first 9 months of the financial year, profit stands at €1,376 billion, compared to €1,433 billion in the same period before. The profit is partly lower due to the higher income tax.
Sold considerably more
Worldwide machine sales increased by more than 30% in the third quarter to gross sales of $10,3 billion. CEO Samuel Allen is pleased. “Agricultural equipment sales in North America and Europe have increased significantly,” explains Allen. "With the acquisition of the German Wirtgen Group, the turnover in the earthmoving branch has also risen sharply. On the other hand, the costs for raw materials and transport rose."
36
procent
Sales in North America were up 30% in the third quarter and outside that it's up 45%. Wirtgen accounts for 30% of this growth. Machinery sales are expected to grow by 2018% for the 30 financial year and to grow by 20% in the fourth quarter. The exchange rates are unfavorable against the dollar.
Total profit is estimated at $2,36 billion, up 25% (over last year). Due to the taxes to be paid, the profit is lower than previously thought ($3 billion). Despite the trade blockades and geopolitical tensions, Allen expects an increase in machine sales.
More sales in Europe
The agricultural sector saw its turnover increase by 19% this financial year. An increase of 15% is assumed for the whole year. Growth of 28% to 5% is expected in the EU-10, while in North America it is 10%. A more favorable situation on European livestock farms should generate more sales, Deere said. In South America, Brazil is the main driver when it comes to an increase in sales.
The German industry association for machine manufacturers (VDMA) is also optimistic. Chairman Bernd Scherer expects a 14% increase in turnover in the sector this year, which is good for €5 billion. In Germany, turnover increased by 19% in the first half. The main export country is France, where good sales are expected due to higher grain prices. In Eastern Europe, sales are declining.
Niels van der Boom
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