John Deere has recorded an exceptionally strong year of sales worldwide. The firm reported a 75% increase in net income for its final quarter of 2022 (ending 30 October 2022).
Total net income for the period was $2.246bn in comparison to $1.283bn in 2021. This was helped substantially by a 40% increase in net sales during quarter four this year. Total net income for the entire 2022 fiscal year was largely helped by the strong final quarter, which helped contribute to a 17.8% total increase in net income for 2022 which amounted to $7.131bn, up from $5.963bn in 2021.
The company’s worldwide net sales and revenues for quarter four totalled $15.536bn, 37% up on the same period last year. This was a strong contributing factor to the $52.6bn in total net sales for the entire 2022 fiscal year, 19% ahead on 2021.
While factors such as rising energy costs and supply chain constraints are cited as the main factors contributing to rising machinery prices, John Deere’s operating profits for its precision agriculture products grew 124% during the final quarter while operating margin increased from 16.7% in 2021 to 23.4% in 2022 during the same period. These increases weren’t only experienced in the precision agriculture division but in its small agriculture and turf division as well as construction and forestry, albeit not to the same extent.
John Deere has set the bar high for itself in 2023, forecasting its net income to be in the range of $8.0bn to $8.5bn. Deere’s outlook for the European market in 2023 is that it will remain flat to up 5%. It said the suspension of shipments to Russia and Ukraine has reduced its revenue forecast for the region. Net sales from the company’s Russian operations represented 2% of consolidated annual net sales from 2017 to 2021. Meanwhile, as of 30 October 2022, John Deere’s net exposure in Russia and Ukraine was approximately $266m, primarily financial assets and inventory.
John C May, chair and chief executive officer, said: “Deere is looking forward to another strong year in 2023 based on positive farm fundamentals and fleet dynamics as well as an increased investment in infrastructure. These factors are expected to support healthy demand for our equipment. At the same time, we have confidence in the smart industrial operating model and our ability to deliver solutions that help our customers be more profitable, productive, and sustainable.”
While net sales rose 40% As John Deere’s financial year came to a close (30 October), the number of new Irish tractor registrations were 10% behind that period of 2021.
A total of 2,067 new tractors were registered in Ireland up until the end of October this year compared with 2,305 in 2021.