With the announcement of our first quarter earnings, John Deere has started out 2018 on a positive note. Net income for the quarter was affected by upfront charges from U.S. tax reform legislation, which we believe will reduce the company's overall tax rate, and be beneficial in the future. Backing out this legislative change, adjusted earnings were $430 million, on sharply higher sales. We have increased our 2018 sales and adjusted net income forecast as a result of our confidence in present market conditions, and in our ability to fulfill customer demand. Now, let's take a closer look at our first quarter results in detail, beginning on slide 3. Net sales and revenues were up 23% to $6.9 billion. For the quarter, Deere reported a net loss of $535 million or $1.66 per share. During this period, the company incurred charges of $965 million related to recent U.S. tax reform legislation. Excluding this charge, adjusted net income was $430 million or $1.31 per share. The charges included an estimated one-time write-down of net deferred tax assets totaling $715 million. Additionally, Deere incurred an estimated one-time charge of $262 million on the repatriation of foreign earnings, will which likely be paid out over the next eight years. Both charges were partially offset by a favorable reduction in the annual effective tax rate of $12 million.
On slide 4, total worldwide equipment operations net sales were up 27% to $5.974 billion. Currency translation was positive by 3 points. The impact of acquisitions was 5 points.
Turning to a review of our individual businesses; starting with Agriculture & Turf on slide 5. Net sales were up 18% in the quarter-over-quarter comparison, primarily driven by higher shipment volumes and the favorable effect of currency translation.
For the quarter, Deere experienced increased demand across key markets, though sales gains were moderated by supply chain and logistic challenges. Progress is already being made to address these issues, and our suppliers and factories expect to catch up over the course of the year. Operating profit was $387 million, up 78% from $218 million last year. The increase was a result of higher shipment volumes and lower warranty expenses, partially offset by higher production costs. Last year's results included a gain on the sale of SiteOne and costs associated with a voluntary employee-separation program. Ag & Turf operating margins were 9.1% in the quarter. Excluding the impact of one-time adjustments, such as the SiteOne gain and the voluntary employee-separation program expenses, incremental margins were 32%, compared with the first quarter of 2017. Before we review the industry sales outlook, let's look at fundamentals affecting the Ag business.
On slide 6, despite increasing demand, global grain and oil seed stocks-to-use ratios are forecast to remain at elevated levels in 2017-2018, as abundant crops have offset strong demand around the world. Corn, soybeans and stock-to-use ratios are expected to decline in 2017-2018 as global demand outpaces production. Conversely, wheat stock-to-use ratio continues to increase to its highest level in almost two decades. Slide 7 outlines U.S. farm cash receipts. 2018 farm cash receipts are estimated to be $372 billion, approximately 1% lower than 2017. Crop cash receipts are projected to decline modestly, as gains from oil crops are offset by declines in feed crops. Receipts from livestock are expected to remain roughly flat year-over-year, with higher quantities compensating for price declines. Lastly, government payments represent the largest year-over-year decline, owing to lower guarantee prices in 2018. Our Ag economic outlook for the EU28 is on slide 8. GDP is expected to grow moderately for the year, though non-economic and geopolitical risks remain elevated. While overall arable farm margins remain slightly below long-term averages, conditions differ by region with some areas, such as Northwest Europe, showing signs of improvement in 2018. Margins for the dairy segment remain above long-term averages, though rising production may pressure prices throughout the year. Sentiment remains positive for beef producers. However, pork prices are weakening due to rising supplies. Shifting to Brazil on slide 9. The chart on the left displays the crop value of agricultural production, a good proxy for the health of agribusiness in Brazil. Ag production is expected to decrease about 2% in 2018 in U.S. dollar terms, due to record production in 2017 and a revision to trend yields in 2018. In local currency, the value of production is forecast to be down about 1%. On the right side of the slide, you will see the eligible rates for Ag-related government sponsored finance programs. While rates for Moderfrota remain at 7.5% for small and midsized farmers and 10.5% for large farmers, the grace period for financing was extended to 14 months in December. This allows growers to capture two harvest seasons before making equipment payments. This enhancement to financing terms demonstrates the government's ongoing commitment to agriculture and is driving continued improvement in farmer confidence. Our 2018 Ag & Turf industry outlooks are summarized on slide 10. Industry sales in the U.S. and in Canada are forecast to be up approximately 10% for the year. Despite range down commodity prices, the industry is experiencing stronger replacement demand for large equipment, as customers express their equipment demand in terms of need versus want. Replacement demand is reflected in the results of our Combine Early Order Program, which ended up in double-digits from last year, and in the large tractor order book, which continues to run ahead of last year. The EU28 industry outlook is forecast to be up about 5% in 2018 as a result of above-average margins in dairy and livestock, as well as improved outlooks in key markets such as France and the UK. In South America, industry sales of tractors and combines are projected to be flat to up 5% for the year. This is being driven mainly by demand in Argentina, which continues to benefit from favorable policy effects, strong fundamentals and pent-up demand. Shifting to Asia, sales are expected to be relatively unchanged from 2017.
Turning to another product category, industry retail sales of turf and utility equipment in the U.S. and Canada are projected to be flat to up 5% in 2018. Deere expects to outpace the industry as a result of new product introductions. Putting this all together on slide 11, fiscal year 2018 Deere sales of worldwide Ag & Turf equipment are now forecast to be up approximately 15%, including about 3 points of positive currency translation. The Ag & Turf division's operating margin is forecast to be about 13.5% for the year, up roughly 1 point from 2017. This implies incremental margins of just under 35%, excluding the impact for one-time adjustments such as the sale of SiteOne, the voluntary employee-separation program, and the acquisition of Blue River Technology.
Now let's focus on Construction & Forestry on slide 12. Net sales were up 57% compared to the first quarter in 2017, primarily driven by strong demand for Construction & Forestry equipment, as well as by the acquisition of Wirtgen, which closed on December 1 of last year. Operating profit was $32 million, which included an operating loss for Wirtgen of $92 million. The loss was attributable to the unfavorable effects of purchase accounting and acquisition costs. C&F operating margins were 1.8% for the quarter, but 8.4% excluding Wirtgen.
Moving to slide 13, the economic indicators affecting the Construction & Forestry industries continue to be supportive of equipment demand. GDP growth is forecast to be solid, continuing the positive trend seen in the U.S. and Canada through much of 2017. Housing demand is growing, but sales remain constrained by supply due to 35-year low inventories for new and existing single-family homes. Along with growing wages and job growth, these factors underpin our outlook for growing housing starts. Single-family housing starts are strong across all regions in the U.S. Single-family homes require extensive earthmoving and lumber content, which are important drivers of earthmoving and forestry equipment.
In 2018, construction investment is forecast to grow 2.2%, up from the previous forecast of 1.4%. The increase is being led by oil and gas and residential activity. Oil prices are forecast to average above $58 a barrel for the year. That's important because oil and gas related construction activity tends to slow when oil prices are below $50, but picks up when prices are above that level.
In addition, machinery rental utilization rates continue improving and rental pricing continues to gain positive traction. Deere's outlook is also reflected in a strong order book and positive trends in retail sales.
Moving to the C&F outlook on slide 14. Deere's Construction & Forestry sales are now forecast to be up about 80% in 2018 as a result of stronger demand for equipment, as well as the acquisition of Wirtgen. The revenue forecast includes about $3.2 billion in sales attributable to the acquisition. The forecast for global forestry markets is up about 5% as a result of improvement in sales in the U.S. and Canada, and strong demand for cut-to-length products in Europe.
C&F's full-year operating margin is now projected to be about 7.5%, which includes the negative impact of purchase accounting and acquisition costs from Wirtgen. Excluding Wirtgen, C&F projects margins to be approximately 11%, which is up from our previous guidance of 10.5%. For the full year in 2018, Wirtgen is expected to be operating profit neutral, as purchase accounting and acquisition expenses completely offset operating profit for the year. On a standalone basis, Wirtgen is forecast to deliver operating margins between 15% and 16% in 2018. Beyond 2018, operating margins are estimated in the 12% to 13% range, including purchase accounting adjustments.
Let's move now to our Financial Services operations. Slide 15 shows the provision for credit losses as a percentage of the average owned portfolio. At the end of January, the annualized provision for credit losses was 2 basis points, reflecting the continued excellent quality of our portfolios. The financial forecasts for 2018 shown on the slide contemplates a loss provision of about 22 basis points, 3 basis points lower than our previous forecast. This would put loss provisions for the year just below the 10-year average of 25 basis points and the 15-year average of 27 points.
Moving to slide 16, Worldwide Financial Services net income attributable to Deere & Company was $425 million in the first quarter versus $114 million last year. For the full year in 2018, net income is forecast to be about $840 million, up from the previous forecast. The higher results for the quarter and the higher full year forecast are primarily due to a benefit from the recent U.S. tax reform legislation, and to a lesser extent, a higher average portfolio and lower losses on leases. Beyond 2018, effective tax rates for John Deere Financial are forecast to be between 24% and 26%.
Slide 17 outlines receivables and inventories. For the company as a whole, receivables and inventories ended the quarter up $4.1 billion. About $350 million of the change relates to currency translation. In the C&F division, the increase is largely attributable to Wirtgen, while for Ag, the increase is due to higher sales as well as pipeline replenishment. By the end of fiscal year 2018, receivables and inventories are expected to increase about $1.7 billion from 2017 levels, driven by the inclusion of Wirtgen as well as the higher sales across the company.
Slide 18 shows cost of sales as a percentage of net sales. Cost of sales for the first quarter was 78.8%. Our 2018 cost of sales guidance is about 75% of net sales, unchanged from our previous guidance.
When modeling 2018, keep these unfavorable impacts in mind: higher production costs and higher incentive compensation costs. On the favorable side, we expect price realization of about 1 point, and a more positive product mix. Now, let's look at some additional details. With respect to R&D expense on slide 19, R&D was up approximately 14% in the first quarter.
Currency translation had an unfavorable impact of 2 points, while another 5 points related to the acquisitions of Wirtgen and Blue River Technology. Our 2018 forecast calls for R&D to be up about 20%, with acquisition-related activities accounting for 9 points of the increase, and currency translation for 1 point. The balance of the R&D increase relates to strategic investments in large Ag and precision Ag that help drive growth for these key areas. Moving now to slide 20, SA&G expense for the equipment operations was up 8% in the first quarter, with acquisition-related activities, the voluntary employee-separation program and currency translation accounting for most of the change. Our 2018 forecast for SA&G expense is up approximately 23%. Excluding acquisition-related expenses, SA&G is forecast to be up about 2% in 2018.
Turning to slide 21, the equipment operations tax rate was 422% in the first quarter, primarily due to the impact of recent U.S. tax reform legislation, as noted earlier. For the remainder of the year, the effective tax rate is expected to be in the range of 25% to 27%, which implies a full year effective tax rate of approximately 62%. Beyond fiscal year 2018, Deere's effective tax rate is projected to be between 25% and 27%. On a long-term basis, recent tax reform legislation is expected to be beneficial to Deere's financial outlook.
Slide 22 shows our equipment operations' history of strong cash flow. Cash flow from equipment operations is now forecast to be about $4.4 billion in 2018. The company's financial outlook is on slide 23. Second quarter equipment sales are forecast to be up 30% to 40% over last year. Our full-year outlook now calls for net sales to be up about 29%, which includes about 1 point of price realization. Finally, our full year 2018 net income forecast is now about $2.1 billion. Excluding the effect of U.S. tax reform legislation, adjusted net income is forecast to be about $2.85 billion using a 29.5% tax rate, which assumes no tax reform impact.
I will now turn the call over to Raj Kalathur for closing comments. Raj?