Rachel Bach
Manager of Investor Communications at Deere & Company
Good morning. John Deere finished the year with strong fourth quarter, thanks to a 40% increase in net sales. Financial results for the quarter included an 18.5% margin for the equipment operation. Across our businesses, performance was driven by continued strong demand, higher production rates and progress on reducing our inventory of partially completed machines. Looking ahead, ag fundamentals remain positive, continuing to drive healthy demand as evidenced by our order books full into the third quarter of fiscal year 2023.
The construction and forestry markets also continued to benefit from solid demand, contributing to the divisions notable performance in the quarter. Similarly, order books are extended into the second half of 2023, providing visibility and confidence in the new fiscal year. Slide three shows the results for fiscal year 2022. Net sales and revenues were up 19% to $52.6 billion, while net sales for the equipment operations were up 21% to $47.9 billion. Net income attributable to Deere and Company was $7.1 billion or $23.28 per diluted share.
Next, fourth quarter results on Slide four. Net sales and revenues were up 37% to $15.5 billion, while net sales for the equipment operations were up 40% to $14.4 billion. Net income attributable to Deere and Company was $2.2 billion or $7.44 per diluted share. Let's take a closer look at fourth quarter results by segment, beginning with our production and precision ag business on Slide five.
Net sales of $7.434 billion were up markedly at 59% compared to the fourth quarter last year. This was primarily due to higher production rates both year-over-year and sequentially. Additionally, we made progress on clearing partially completed machines from inventory, both contributed to higher shipment volumes for the quarter.
Price realization in the quarter was positive by about 19 points, whereas currency translation was negative by about three points. Operating profit was $1.74 billion, resulting in a 23.4% operating margin for the segment. The year-over-year increase in operating profit was primarily due to higher shipment volumes and price realization, partially offset by higher production costs and higher SA&G and R&D spend.
Operating profit for the quarter was negatively impacted by higher reserves on the remaining assets in Russia, affecting the quarter's margin by about one point. The production costs were mostly elevated material and freight, overhead spend was also higher for the period as factories continue to experience some production inefficiencies due to supply challenges and clearing of partially completed machines in inventory. Despite these headwinds, our factories were able to maintain higher rates of production and reduce the number of partially completed machines in inventory, allowing us to deliver more equipment to our dealers and customers.
Moving to Small Ag and Turf on Slide six, net sales were up 26% totaling $3.544 billion in the fourth quarter due to higher shipment volumes and price realization which more than offset negative currency translation. Price realization in the quarter was positive by nearly 13 points, while currency translation was negative by over six points. For the quarter, operating profit was higher year-over-year at $506 million, resulting in a 14.3% operating margin. The increased profit was primarily due to price realizations and improved shipment volumes and mix. These were partially offset by higher production costs, higher R&D and SA&G expenses and unfavorable currency impacts.
Please turn to Slide seven for the fiscal year 2023 Ag and Turf industry outlook. We expect Large Ag equipment industry sales in US and Canada to be up 5% to 10%, reflecting resilient demand that continues to be higher than the industry's ability to supply, bolstered by the need to replace aging fleets. Our order books now withstand into the third quarter and the dealers remain on allocation for 2023. For Small Ag and Turf, industry demand is estimated to be flat to down 5%. The dairy and livestock segment remain steady. However, demand for products more correlated to the general economy, such as compact utility tractors and turf equipment is softening.
Shifting to Europe, the industry is forecast to be flat to up 5%. Farm fundamentals in the region are generally stable since small grain prices continue to outpace input inflation. Meanwhile, supply constraints in 2022 are expanding the equipment replacement into 2023. In South America, we expect industry sales of tractors and combines to be flat to up 5%, moderated by supply chain constraints. The region remains one of the stronger end-markets especially in Brazil where they are forecasting record production and strong profitability for the year.
Industry sales in Asia are projected to be down moderately as India the world's largest tractor market by unit stabilizes after record highs in 2021. Turning now to our segment forecast on Slide eight, we anticipate Production and Precision Ag net sales to be up between 15% and 20% in fiscal year 2023. The forecast assumes approximately 11 points of positive price realization and 1 point of negative currency translation. For the segment's operating margin, our full-year forecast between 22% and 23%.
Slide nine shows our forecast for the Small Ag and Turf segment. We expect fiscal year 2023 net sales to be flat to up 5%. This guidance includes about 7 points of positive price realization, partially offset by 2 points of unfavorable currency impact. After accounting for the FX of price and FX, the guide implies a slight volume decrease due to the softening in certain product segments. The segment's operating margin is projected to be between %14.5 and 15.5%.
Turning to Construction and Forestry on Slide 10, price realization and higher shipment volumes both contributed to a 20% increase in net sales for the quarter to $3.373 billion. Price realization in the quarter was positive by nearly 13 points. This was partially offset by almost 5 points of negative currency translation. Operating profit increased to $414 million, resulting in a 12% operating margin. Favorable price realization and higher shipment volumes more than offset higher production costs during the quarter. Segment quarterly results were also negatively impacted by 1.5 points of margin due to higher reserves on the remaining assets in Russia.
Now I'll cover our 2023 Construction and Forestry industry outlook on Slide 11. Industry sales of both earth moving and compact construction equipment in North America are expected to be flat to up 5%. End markets overall are expected to remain steady as oil and gas, US infrastructure spend and capex programs from the independent rental companies offset moderation in the residential sector.
Global forestry markets are expected to be flat as stronger European demand continues to be limited by the industry's ability to produce and demand in North America begins to subdue. Global roadbuilding markets are also expected to be flat. Demand remained strongest in the Americas, while Europe is softening and Asia remained sluggish. Our C&F segment outlook is on Slide 12. 2023 net sales are forecast to be up around 10%. Our net sales guidance for the year includes about 8 points of positive price realization and just over one point of negative currency translation.
The segment's operating margin is projected to be 15.5% to 16.5%. Note, fiscal year 2022 operating margin would have been 14.5% excluding special items such as the one-time gain from the re-measurement of the Deere Hitachi assets. Let's transition to our financial services operation on Slide 13.
Worldwide Financial Services net income attributable to Deere and Company was slightly higher in the fourth quarter year-over-year, mainly due to income earned on a higher average portfolio partially offset by less favorable financing spread. The provision for credit-loss increased reflecting economic uncertainty in Russia. Financial reservices received an intercompany benefit from the equipment operations which guarantees investments in certain international markets, including Russia.
For fiscal year 2023, the net income forecast is $900 million. Results are expected to be slightly higher year-over-year primarily due to income earned on a higher average portfolio. The portfolio has continued to grow in-line with growth in the equipment operations. Overall, financial services is expected to continue to deliver steady results. Credit loss provisions, lease return rates and past dues all remain in good shape, reflecting sound balance sheets for our customers.
Slide 14 outlines our guidance for net income, our effective tax-rate and operating cash flow. For fiscal year 2023, our full-year net income forecast is a range of $8 billion to $8.5 billion. We expect favorable price realization and higher volumes to more than offset increased spend. Next our guidance incorporates an effective tax rate between 23% and 25%. And lastly cash flow from equipment operations is projected to be between $9 billion and $9.5 billion.
Before we transition to Q&A, John, I'd like to thank you for joining us today. Do you have anything you'd like to add?