John Deere has a secret side that makes lots of money
Say John Deere and people think of farming, construction, landscaping and the heavy equipment the company makes for those industries. Few outside of Deere’s world see it as a financial services outfit. But Deere has a large and profitable finance wing, which brought in $2.8 billion last year, providing loans and leases for its iconic green machines, which can cost hundreds of thousands of dollars a piece.
With commodity prices in the dirt, times are tough for farmers, which means they’re not spending as much on new equipment. Deere’s profits took a sharp dive in 2015.
Now that Deere’s main business of selling equipment is struggling along with its farmer customers, its finance arm provides a much larger share of profits than in the past — a third last year. And with more tough times for agriculture in the forecast, Deere may have to rely on its lesser-known finance side even more in the months ahead.