Upfront: Encouraging signs
By Steve Noe
As the first half of 2012 draws to a close, I’m pleased to share some positive news about our industry. The Toro Company and Deere & Company recently announced record-setting results for the second quarter. Toro also announced that despite anticipating challenges, it now has higher expectations for the year. Details of both announcements are as follows:
On May 24, Toro reported net earnings of $68.8 million, or $2.26 per share, on net sales of $691.5 million for its fiscal second quarter ended May 4. In the comparable fiscal 2011 period, the company delivered net earnings of $60.3 million, or $1.88 per share, on net sales of $631.6 million.
For the first six months, Toro reported net earnings of $88.7 million, or $2.91 per share, on net sales of $1,115.3 million. In the comparable fiscal 2011 period, the company posted net earnings of $77.5 million, or $2.41 per share, on net sales of $1,014.8 million.
“We delivered another quarter of strong sales and earnings growth, accelerated by our new product portfolio and the early start to spring and favorable weather conditions across much of the U.S.,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “Turf is growing — driving sales of residential mowing products, and golfers are playing more golf — contributing to revenue for golf courses and improving their ability to invest in new products. Our golf, landscape and grounds, and micro irrigation businesses in the U.S. have had a very strong first six months, which has offset challenges in our international business created by the economic issues in Europe.”
“While a portion of our results was the benefit of an accelerated spring, we are hopeful the early start will extend the selling season and drive incremental sales,” added Hoffman. “Our product lineup is strong, our core businesses are well positioned, and our investments in light construction, hardscapes and rental products will contribute to future growth. We are raising our outlook for the year, even against a backdrop of a challenging sales environment in Europe, and an anticipated soft snowthrower pre-season ahead of us.”
Toro now expects revenue growth for fiscal 2012 to be about 7 to 8 percent and net earnings to be about $4.30 per share, which includes the $0.15 to $0.20 negative earnings per share impact for investments related to its Astec and Stone product line acquisitions.
As reported May 16, net income attributable to Deere & Company was $1.056 billion, or $2.61 per share, for the second quarter of 2012 ended April 30, compared with $904.3 million, or $2.12 per share, for the same period last year.
For the first six months of 2012, net income attributable to Deere & Company was $1.589 billion, or $3.91 per share, compared with $1.418 billion, or $3.32 per share, last year.
Worldwide net sales and revenues increased 12 percent, to $10.009 billion, for the second quarter and rose 12 percent to $16.775 billion for six months. Net sales of the equipment operations were $9.405 billion for the quarter and $15.524 billion for six months, compared with $8.328 billion and $13.841 billion for the same periods last year.
“John Deere is well on its way to a year of outstanding performance after reporting an eighth consecutive quarter of record earnings,” said Samuel R. Allen, chairman and chief executive officer of Deere & Company. “Our results are a reflection of positive conditions in the global farm economy, which is continuing to show impressive strength and endurance. Deere is gaining new customers throughout the world, who are responding with great enthusiasm to our innovative lines of equipment.”
At the same time, Allen noted, the company is successfully managing major new-product launches featuring advanced engine-emission technology, while significantly expanding its global market presence. “Skillful execution of our operating plans is helping Deere capitalize on today’s strong farm economy and meet the world’s growing need for productive machinery,” he added.
How has your dealership fared in the first half of 2012, and what are your expectations for the second half of the year? Please let me know by dropping me an email at snoe@m2media360.com. Hope you have positive first-half results to report and an optimistic outlook for the second half. Look forward to hearing from you.
OPE Editor Steve Noe
snoe@m2media360.com
