Deere & Company reported net income of $ 498.5 million for the first quarter of fiscal 2019. Results are impacted by higher material and logistics costs as well as customer uncertainty due to tariffs and trade restrictions, said Chairman and CEO of Deere & Company, Samuel R. Allen. They are leading to a reluctance to buy. At the same time, sales of John Deere construction and forestry machinery continued to rise sharply.
According to its own estimates, the company's machine sales in 2019 are expected to increase by approx. 7% compared to the previous year. The impact of unfavorable exchange rates for the financial year amounts to 2%. An increase in revenues and revenues of 7% is expected for the 2019 financial year. The annual net profit is estimated at 3.6 billion US $.
The revenues of the construction and forestry machinery division rose very sharply compared to the first quarter of 2018. One reason for this is the inclusion of the Wirtgen Group results for the entire quarterly period, while only one month was taken into account in 2018. The two additional months contributed 24% to the increase in the current quarter. In addition, sales increased due to better prices and higher volumes, with unfavorable exchange rates having a negative impact.
Forecasts of global sales of John Deere construction and forestry machines take into account the Wirtgen Group's 12-month sales, compared to 10 months in the 2018 financial year. The two additional months are expected to contribute 4% to the 2019 sales growth. The outlook for the construction and forestry machinery division reflects a generally positive starting position and economic growth worldwide. The global forestry business is expected to be 5-10% higher, with stronger demand in the EU28 and Russia.