Deere & Company (NYSE:DE) Q2 2018 Earnings Conference Call - Final Transcript
May 18, 2018 • 10:00 am ET
Good morning and welcome to John Deere & Company Second Quarter Earnings Conference Call. Your lines have been placed on listen-only until the question-and-answer session after today's conference.
I'd now like to turn over the call to Mr. Josh Jepsen, Director of Investor Relations. Thank you. You may begin.
Thanks, Angela. Hello. Also on the call today are Raj Kalathur, our Chief Financial Officer; Max Guinn, President of the Construction and Forestry Division; Ryan Campbell, Vice President and Comp Controller; and Brent Norwood, Manager, Investor Communications. Today, we'll take a closer look at Deere's second quarter earnings, then spend some time talking about our markets and current outlook for fiscal 2018. After that, we'll respond to your questions.
Please note that slides are available to complement the call this morning. They can be accessed on our website at www.johndeere.com/earnings.
First a reminder. This call is being broadcast live on the Internet and recorded for future transmission and use by Deere & Company. Any other use, recording, or transmission of any portion of this copyrighted broadcast without the expressed written consent of Deere is strictly prohibited. Participants on 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 plans and projections for the future that are subject to important risks and uncertainties. Additional information concerning factors that could cause actual results to differ materially is contained in the Company's most recent for 8-K and periodic reports filed with the Securities and Exchange Commission.
This call may include financial measures that are not conforming with financial principles generally accepted in the United States of America, GAAP. Additional information concerning these measures, including reconciliation to comparable GAAP measures is included in the release and posted on our website at www.johndeere.com/earnings under quarterly earnings and events.
Today, John Deere reported higher earnings for the second quarter. It was another strong performance, helped by a broad-based improvement in market conditions and a favorable customer response to our innovative products. Farm machinery sales are making solid gains in markets throughout the world, while construction equipment sales continued to move sharply higher.
Now, let's take a closer look at our second quarter results in detail beginning on Slide 3. Net sales and revenue were up 29% to $10.72 billion. Net income attributable to Deere & Company was $1.208 billion, or $3.67 per share. The results for the quarter included a favorable net adjustment to provisional income taxes of $174 million. Excluding this item, adjusted net income was $1.034 billion.
On Slide 4, total worldwide equipment operations net sales were up 34% and $9.747 billion. Currency translation was positive by 3 points. The impact of acquisitions was 12 points.
Turning to a review of our individual businesses, starting with agriculture and turf on Slide 5. Net sales were up 22% in the quarter-over-quarter comparison, primarily driven by higher shipment volumes and the favorable effect of