Good news for John Deere & Company.
On Tuesday the green industry manufacturer reported worldwide net income of $247.5 million for the third quarter of 2003. That’s a 68-percent increase over last year’s figure of $147.6 million for the same period.
And a close look at the company's commercial and consumer equipment division shows healthy figures. Compared with last year, division sales are up 18 percent for the quarter – and they increased 19 percent in the first nine months of the year. Operating profit in the commercial and consumer equipment realm increased to $104 million for the quarter and $237 million for nine months, compared with $61 million and $97 million, respectively, in 2002.
Improvements can be attributed to strong retail demand for recently introduced products and the impact of expanded distribution channels.
“These results build on the success of prior quarters and reflect strong sales of new products and the company’s ongoing efforts to hold down costs and operate more efficiently at lower asset levels,” observes Robert Lane, chairman and CEO. “We have achieved increased profitability in our construction and forestry and commercial and consumer operations, which more than offset our planned lower production volumes in the agricultural equipment division.”
Improved results were connected, mostly, to higher sales and growth in production volumes. Partially offsetting these factors were higher promotional and support costs related to new products, as well as higher post-retirement benefit costs of $7 million for the quarter and $23 million for nine months. Growth potential for both periods last year was stifled by restructuring costs related to the closure of certain facilities.
And this upward trend in sales is expected to continue in John Deere's future. Commercial and consumer equipment sales are expected to continue to benefit from the success of recently introduced products, particularly compact tractors and lawn tractors. As a result, sales should be up more than 15 percent for the year. As projected, fourth-quarter production levels are expected to be down by more than 25 percent, consistent with the division’s build-to-demand strategy.
The author is Assistant Editor-Internet of Lawn & Landscape magazine and can be reached at aanderson@lawnandlandscape.com.