Deere & Company reported lower sales and net income for the second quarter, but still beat some analysts’ expectations and signaled that 2020 farm equipment sales will not drop as much as some had predicted. The firm reported net income of $665.8 million for the second quarter ended May 3, 2020, down 41% compared with net income of $1.135 billion for the quarter ended April 28, 2019. For the first six months of the year, net income attributable to Deere & Company was $1.182 billion, compared with $1.633 billion for the same period last year. "John Deere's foremost priority in confronting the coronavirus crisis has been to safeguard the health and well-being of employees while fulfilling its obligation as an essential business serving customers throughout the world," said John C. May, chairman and chief executive officer. "We've had good success in these areas thanks to the proactive measures we have taken to keep employees safe and our production facilities and parts distribution centers operational.” Deere worldwide sales of agriculture and turf equipment are forecast to decline 10 to 15 percent for fiscal year 2020, including a negative currency-translation effect of about 2 percent. During a call with investors, Cory Reed, President, Worldwide Agriculture & Turf Division: Americas and Australia; Global Harvesting, pointed out that, because of investments made by both Deere and its dealers over the last 10 years, including Deere’s investment in “critical precision ag infrastructure,” the company was able to meet customer needs throughout the pandemic. He said there are over 200,000 machines digitally connected back to dealers that enable problems to be diagnosed and resolved without having to be in the field looking at the problem. Despite a lot of uncertainty ahead over commodity prices and trade with China, Reed said an aging fleet of farm equipment and the new technologies available today provide an opportunity for customers to lower their cost structure with new purchases. “In an environment where overall demand is the question, the thing that customers can do is invest to make sure they have the lowest cost of production of anyone in the market,” he added.
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