Deere & Company (NYSE:DE) Q4 2019 Earnings Conference Call - Final Transcript

Nov 27, 2019 • 10:00 am ET


Deere & Company (NYSE:DE) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Deere & Company Fourth Quarter Earnings Conference Call. Your lines have been placed on a listen-only, until the question-and-answer session of today's conference.

I would now like to turn the call over to Mr. Josh Jepsen, Director of Investor Relations. Thank you. You may begin.

Josh Jepsen

Thanks, Julie. Hello, also on the call today are Ryan Campbell, our Chief Financial Officer; John Lagemann, Senior Vice President, Ag and Turf sales and marketing; and Brent Norwood, Manager, Investor Communications. Today, we'll take a closer look at Deere's fourth quarter earnings, then spend some time talking about our markets and current outlook for fiscal 2020. After that we'll respond to your questions.

First, a reminder. This call is being broadcast live on the Internet and recorded for future transmission and used 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 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 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 Form 8-K and periodic reports filed with the Securities and Exchange Commission.

This call may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America or GAAP. Additional information concerning these measures including reconciliations to comparable GAAP measures is included in the release and posted on our website at under Quarterly Earnings & Events. Brent?

Brent Norwood

John Deere completed the fourth quarter with a strong finish in retail sales for both divisions, while uncertainty lingers in the US ag market, replacement demand and increased adoption of precision technology will continue to be critical factors for 2020. As North American farmers work through trade issues and adverse weather conditions, sentiment in Brazil remained stable offsetting weakness in other South American markets such as Argentina.

In the construction and forestry division, retail demand remains steady as end-markets benefit from generally positive economic conditions. At the same time, dealers are cautiously managing inventory levels to ensure their ability to meet current demand, while maintaining flexibility as activity fluctuates.

Now let's take a closer look at our year-end results for 2019 beginning on Slide three. For the full-year, net sales and revenue were, up 5% to $39.258 billion, while net sales for equipment operations were, up 5% to $34.886 billion. Net income attributable to Deere & Company was $3.253 billion or $10.15 per diluted share. The results included a favorable benefit of $68 million to the provision for income taxes, due to US tax reform. Excluding this item, adjusted net income was $3.185 billion or $9.94 per diluted share.

Slide four, shows the results for the fourth