Deere and Company Profit Expands

NEW YORK - Aug 15/06 - SNS -- Deere & Company reported a net income of U.S. $436 million on sales of $6,257 million for the third quarter ending July 31, compared to a bet of $387 on sales of $5,823 million during the same three month period of the previous fiscal year.

This lifted fiscal year to date net earnings to $1,416 million on sales of $17,030 million during the first nine months of the current fiscal year, compared to $1,214 million on sales of $16,199 million the first three quarters of the previous fiscal year.

Agricultural division sales increased 1 percent for the quarter but were down 4 percent through nine months. While the physical volume of shipments declined for the quarter, sales increased due to improved price realization and currency translation. Year-to-date sales were down as a result of lower shipments and currency translation, partially offset by improved price realization.

Operating profit was $249 million for the quarter and $739 million for nine months, compared with $262 million and $913 million for the respective periods last year. Operating profit was down for both periods mainly due to lower shipments and worldwide production volumes, as well as higher selling and administrative expenses.

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

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