Deere Reports Increased Net

NEW YORK - May 16/06 - SNS -- Deere & Company reported net income of U.S. $745 million on gross revenue of $6,562 million for the second quarter ending April 30, compared to a net of $604 million on revenue of $6,441 million during the same three month period last year.

This lifted net income for the first half of the current fiscal year to $981 million on revenue of $10,764 million, compared to a net of $827 million on revenue of $10,375 million during the same six-month period last year.

In reporting its results, the company noted agricultural division sales decreased 7% for the quarter and 6% for the six months. Sales declined due to lower shipments and currency translation, partially offset by improved price realization.

Operating profit was $385 million for the quarter and $491 million for the six months, compared with $488 million and $651 million for the respective periods last year. Operating profit was down for both periods primarily due to lower shipments and inefficiencies related to reduced worldwide production volumes.

Production was down substantially in the second quarter, as planned, in line with Deere's ongoing commitment to asset discipline. Results for both the quarter and six months received benefit from improved price realization and lower retirement benefit costs.

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