Deere & Company (DE) has reported a 23.82 percent fall in profit for the quarter ended Jan. 29, 2017. The company has earned $193.80 million, or $0.61 a share in the quarter, compared with $254.40 million, or $0.80 a share for the same period last year.
Revenue during the quarter went up marginally by 1.82 percent to $5,625.20 million from $5,524.50 million in the previous year period. Gross margin for the quarter expanded 201 basis points over the previous year period to 32.50 percent. Total expenses were 90.59 percent of quarterly revenues, down from 90.91 percent for the same period last year. This has led to an improvement of 32 basis points in operating margin to 9.41 percent.
"John Deere has started out the year on a positive note in the continued face of soft market conditions," said Samuel R. Allen, chairman and chief executive officer. "Although the quarter’s sales and earnings were somewhat lower than last year, all of our businesses remained solidly profitable. Deere’s performance showed further benefits from the sound execution of its operating plans, the strength of a broad product portfolio and the impact of a more flexible cost structure. At the same time, we are seeing signs that after several years of steep declines key agricultural markets may be stabilizing."
For fiscal year 2017, Deere & Co expects revenue to grow at 4 percent and forecasts net income to be $1,500 million.
Operating cash flow remains negative
Deere & Co has spent $742.40 million cash to meet operating activities during the quarter as against cash outgo of $777.60 million in the last year period.
Cash flow from investing activities was $1,104.40 million for the quarter, up 29.69 percent or $252.80 million, when compared with the last year period. It has incurred net capital expenditure of $14.40 million on net basis during the quarter, down 94.85 percent or $265.20 million from year ago period.
The company has spent $768.50 million cash to carry out financing activities during the quarter as against cash outgo of $742.90 million in the last year period.
Cash and cash equivalents stood at $3,890 million as on Jan. 29, 2017, up 12.43 percent or $430.10 million from $3,459.90 million on Jan. 31, 2016.
Debt comes down marginally
Deere & Co has recorded a decline in total debt over the last one year. It stood at $34,578.40 million as on Jan. 29, 2017, down 4.41 percent or $1,595.60 million from $36,174 million on Jan. 31, 2016. Total debt was 61.42 percent of total assets as on Jan. 29, 2017, compared with 64.55 percent on Jan. 31, 2016. Debt to equity ratio was at 5.07 as on Jan. 29, 2017, down from 5.48 as on Jan. 31, 2016. Interest coverage ratio deteriorated to 2.54 for the quarter from 2.90 for the same period last year.
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