Deere & Company (DE) Q4 2013 earnings summary

Executive summary

• FY13 net sales and revenues rose 5% to $37.795B; net income attributable to Deere & Company rose 15% to $3.537B, a third consecutive annual record.

• Diluted EPS increased to $9.09 from $7.63, benefiting from fewer shares outstanding.

• SVA reached a record $3.39B and operating return on operating assets reached a record 31.8%.

Financial highlights

• Equipment operations sales rose 4% to $34.998B; price realization contributed 3%, partly offset by a 1% unfavorable FX effect.

• Equipment operating profit rose to $5.058B from $4.397B, reflecting higher volumes and price realization, partly offset by costs, FX and warranty expense.

• Cost of sales was 73.3% of net sales, down from 74.6%, mainly on improved price realization.

• Operating cash flow was $3.254B in FY13.

Outlook and guidance

• FY14 equipment sales were forecast to decline ~3% overall and ~2% in Q1; FY14 net income guidance was ~$3.3B.

• FY14 A&T sales were forecast down ~6%, C&F sales up ~10%, and Financial Services net income at ~$600M.

• FY14 equipment-operations capital expenditures were estimated at $1.2B.