Deere & Company (DE)
Q3 2010 Earnings Call Transcript
August 18, 2010 10:00 a.m. ET

Executives

Marie Z. Ziegler – Vice President, Investor Relations
Susan Karlix – Investor Relations
James M. Field – Chief Financial Officer

Analysts

Ann Duignan – J.P. Morgan
Stephen Volkmann – Jefferies & Company
Jerry Revich – Goldman Sachs
David Raso – ISI Group
Henry Kirn – UBS
Meredith Taylor – Barclays Capital
Eli Lustgarten – Longbow Securities
Seth Weber – RBC Capital Markets
Joel Tiss – Buckingham Research

Presentation

Operator

Good morning and welcome to the Deere Third Quarter Earnings Conference Call. Your lines have been placed on listen-only until the question-and-answer session of today''s conference. I would now like to turn the call over to Ms. Marie Ziegler, Vice President, Investor Relations. Please go ahead.

Marie Z. Ziegler

Good morning. Also on the call today are Jim Field, our Chief Financial Officer as well as Susan Karlix and Justin Merrimac from the Deere Investor Relations staff.

This morning, we''ll take a closer look at Deere''s third quarter earnings and then spend some time talking about our markets and how we see the last quarter of our fiscal year shaping up. After that, we''ll respond to your questions.

Please note that slides are available to complement the call this morning and can be accessed on our website at www.johndeere.com.

First, as usual, a reminder. This call is being broadcast live on the Internet and recorded for future transmission and use by Deere and Thomson Reuters. Any other use, recording or transmission of any portion of this copyrighted broadcast without the express written consent of Deere is strictly prohibited. Participants in the call, including the Q&A session, agree that their likeness and remarks in all media may be stored and used as part of the earnings call.

This call includes forward-looking comments concerning the company''s projections, plans and objectives for the future that are subject to important risks and uncertainties. Actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially is contained in the company''s most recent Form 8-K and periodic reports filed with the Securities & Exchange Commission.

The company, except as required by law, undertakes no obligation to update or revise its forward-looking information. The call and accompanying materials are not an offer to sell or a solicitation of offers to buy any of the company''s securities. This call may also include financial measures that are not in conformance with accounting principles generally accepted in the United States of America, otherwise known as GAAP.

Additional information concerning these measures, including reconciliations to comparable GAAP measures is posted on our website at www.johndeere.com/financialreports under Other Financial Information. Call participants should consider the other information on risks and uncertainties and non-GAAP measures in addition to the information presented on today''s call.

And now for a closer look at our third quarter, here is Susan.

Susan Karlix

Thank you, Marie. John Deere''s strong performance continued in the third quarter of 2010. Income was up 47% on a sales increase of 18%. Earnings were the highest for any third quarter in the company''s history and sales were the second highest. The gain was led by Ag & Turf, which had another blockbuster quarter. Construction and Forestry had its highest profit in seven quarters and our Credit Operations had another solid performance.

The company is being helped by somewhat improved business conditions, but tailwinds are only part of the story. After all, construction markets are still weak by historical standards and some Ag markets such as Europe and the CIS remain under pressure.