Deere & Company has announced worldwide net income of $222.8 million, or $.89 per share, for the first quarter ended Jan. 31, compared with net income for the same period last year of $170.8 million, or $.68 per share.

Worldwide net sales and revenues grew 18 percent to $4.127 billion for the first quarter compared with $3.484 billion a year ago. Net sales of the equipment operations were $3.526 billion for the quarter versus $2.912 billion last year.

Said Robert W. Lane, chairman and CEO: "Deere's focus on improved operating performance has served us well. Our pattern of consistent product investment has allowed customers to appreciate the value in our advanced new models of equipment. Our steps to achieve more flexibility in manufacturing and order fulfillment have also played a role in our success. As a result, the company is positioned to meet our objectives for strong financial performance."

The company's equipment sales in the U.S. and Canada rose 20 percent for the quarter. Outside the U.S. and Canada, sales increased by 16 percent, excluding currency translation, and by 23 percent on a reported basis.

In the Agricultural Equipment Division, sales increased 26 percent for the quarter. The sales increase was mainly due to higher shipments, reflecting continued strong retail demand, as well as improved price realization and the impact of currency translation. Operating profit nearly doubled, to $163 million compared with $85 million last year. The operating-profit improvement was primarily driven by higher worldwide sales and efficiencies related to stronger production volumes. Improved price realization offset a significant portion of an increase in raw material costs.

In the U.S., the livestock and dairy sectors are expected to remain in solid condition in 2005, while government payments largely offset the effect of lower commodity prices. As a result, U.S. farm-cash receipts for the year are forecast to remain near the record level of 2004. Given these conditions, Deere now expects industry retail sales in the U.S. and Canada to be up 5 to 10 percent for fiscal 2005 in comparison with the positive levels of last year.

In other parts of the world, industry retail sales in Western Europe are forecast to be flat to down 5 percent for the year. Farmers in the region benefited from a good fall harvest and are expected to see 2005 income in line with last year. In South America, industry sales are forecast to be down 20 to 30 percent as a result of the combination of a weaker U.S. dollar and lower commodity prices, as well as increased input costs.

Based on these factors and market conditions, worldwide sales of John Deere agricultural equipment are forecast to be up 7 to 9 percent for the year excluding the impact of exchange rates. Currency is expected to add about three percentage points to the company's farm-machinery sales for the year.

Source: Company Release