John Deere Big Gains! 11% Jump Forecasted, But Stocks Fall
Dubuque County’s largest employer is seeing big profits. John Deere Dubuque Works’ reported an increase in income in its recently completed quarter. For the nine months of John Deere’s fiscal year so far, net sales totaled about $37 billion, that’s up 13% from the same period last year, earnings data released from Deere’s construction and forestry division, which includes our local John Deere Dubuque Works. The company announced on Friday that they are forecasting net income for this fiscal year, 2022, to be upwards of $7 billion, which would be an overall 11% jump from 2021. Although, that current figure is down from its prior forecast of $7.4 billion.
Unfortunately stock prices also dropped. Deere stated their earnings for the three months ending on August 1st came in at $6.16 per share, up 17.3% from the same period last year, but well shy of the forecasted $6.69 per share. Group worldwide sales rose 22% from last year to $14.1 billion, firmly topping forecasts of $12.8 billion.
In November of last year (2021) Union members ratified a new agreement with Deere & Co., putting an end to a five-week strike and setting the stage for a return to normalcy at the largest employer in Dubuque County. Under this current deal, union members receive a 10% pay increase in their first year of the contract, as well as subsequent increases of 5% in the contract’s third and fifth years.
In addition, the offer included 3% lump-sum payments in the second, fourth and sixth years of the deal. The offer also provided an $8,500 ratification bonus, preserved a pension option for new employees, made workers eligible for health insurance sooner and maintained their no-premium health insurance coverage. The contract between UAW and Deere covers more than 10,000 production and maintenance workers at about a dozen facilities across the Midwest. John Deere Dubuque Works employs approximately 2,800 workers, and about 1,500 of them are union members.
This strike occurred against the backdrop of what was also a successful year for Deere. The company reported net income of $4.7 billion through the first three quarters of the 2021 fiscal year, and easily eclipsed the $2 billion reported through the first nine months of the 2020 fiscal year.