John Deere sees Q1 growth
By Helen Wright16 February 2011
Construction and forestry equipment sales at John Deere climbed +81% during the first quarter, reversing last year's operating loss of US$ 37 million to produce an operating profit of US$ 88 million for the division.
Sales in the division grew to US$ 1.1 billion from US$ 630 million in the first three months of fiscal 2010.
John Deere said a price increase of +2% contributed to the growth, in addition to "significantly higher" shipment and production volumes.
"Construction equipment shipments are experiencing some degree of recovery," CEO Samuel Allen said, adding that the first quarter results were "especially gratifying in light of market conditions that remain below normal levels in certain key sectors".
John Deere forecast construction and forestry equipment sales to rise by about +35% for 2011, and also projected growth in sales to independent rental companies.
The company's group-wide net income for the first quarter more than doubled to US$ 514 million against the same period in 2010 as demand improved for equipment across the group's divisions.
On a group level, John Deere increased its profit forecast for fiscal 2011 to US$ 2.5 billion and projected company-wide equipment sales to increase between +18% and +20%. The company also projected a +25% increase in equipment sales in the second quarter.