MOLINE, Ill. — Net income attributable to Deere & Co. was $641.8 million, or $1.97 per share, for the third quarter ended July 30, 2017, compared with $488.8 million, or $1.55 per share, for the quarter ended July 31, 2016.

For the first 9 months of fiscal 2017, net income attributable to Deere & Co. was $1.649 billion, or $5.11 per share, compared with $1.239 billion, or $3.91 per share, for the same period last year.

Worldwide net sales and revenues increased 16%, to $7.808 billion, for the third quarter and increased 8%, to $21.720 billion, for the first 9 months. Net sales of the equipment operations were $6.833 billion for the third quarter and $18.791 billion for 9 months, compared with $5.861 billion and $17.737 billion for the periods last year.

Agriculture & Turf. Sales increased 13% for the quarter and 5% for 9 months primarily due to higher shipment volumes and price realization, partially offset by higher warranty costs.

Operating profit was $685 million for the quarter and $1.899 billion year to date, compared with respective totals of $571 million and $1.329 billion last year. Results for the quarter benefited from higher shipment volumes and price realization, partially offset by increases in production costs, warranty expenses and selling, administrative and general expenses. Year-to-date results received support from higher shipment volumes, price realization and a more favorable sales mix, partially offset by increased production costs and higher warranty expenses. The gain on the sale of a partial interest in SiteOne contributed to the division's results for both periods.

Financial Services. Fiscal year 2017 net income attributable to Deere & Co. for the financial services operations is expected to be approximately $475 million. In comparison with performance in 2016, the outlook reflects lower losses on lease residual values, partially offset by higher selling, administrative and general expenses, less-favorable financing spreads and an increased provision for credit losses.

Ag & Turf Conditions & Outlook

Deere's worldwide sales of agriculture and turf equipment are forecast to increase by about 9% for fiscal year 2017, including a positive currency-translation effect of about 1%. Industry sales for agricultural equipment in the U.S. and Canada are forecast to be down about 5% for 2017, reflecting weakness in the livestock sector and the continuing impact of low crop prices. The decline is affecting both large and small equipment.

Full year 2017 industry sales in the EU28 member nations are forecast to be flat to down 5%, with the decline attributable to low commodity prices and farm incomes. South American industry sales of tractors and combines are projected to be up about 20% as a result of improving economic and political conditions in Brazil and Argentina. Asian sales are projected to be flat to down slightly.

Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about flat for 2017.

Summary of Operations

Net sales of the worldwide equipment operations increased 17% for the quarter and 6% for the first 9 months compared with the year-ago periods. Sales included price realization of 1% for the quarter and 2% year to date. Foreign-currency rates did not have a material translation effect on net sales for either period compared with last year. Equipment net sales in the U.S. and Canada increased 11% for the quarter and were down 1% for the first 9 months. Outside the U.S. and Canada, net sales increased 25% for the quarter and 17% for 9 months, with favorable currency-translation effects of 1% for both periods.

Deere's equipment operations reported operating profit of $795 million for the quarter and $2.152 billion for 9 months, compared with $625 million and $1.526 billion, respectively, last year. The improvement for the quarter was primarily driven by higher shipment volumes and price realization, partially offset by increased production costs, higher selling, administrative and general expenses and warranty costs. On a year-to-date basis, results benefited from higher shipment volumes, price realization and a favorable product mix, partially offset by increased production costs, higher warranty costs and higher selling, administrative and general expenses. Results for both periods were aided by a gain on the sale of a partial interest in SiteOne Landscape Supply Inc. (SiteOne).

Net income of the company's equipment operations was $506 million for the third quarter and $1.291 billion for 9 months, compared with $353 million and $873 million for the corresponding periods of 2016. In addition to the operating factors mentioned above, a lower effective tax rate improved results for the third quarter of 2017.

Financial services reported net income attributable to Deere & Co. of $131.2 million for the quarter and $349.1 million for 9 months compared with $125.9 million and $357.9 million last year. Results for the quarter benefited from lower losses on lease residual values, partially offset by a higher provision for credit losses and higher selling, administrative and general expenses. Year-to-date results were affected by less favorable financing spreads and higher selling, administrative and general expenses, partially offset by lower losses on lease residual values.

Source: Deere & Co.