The main body of the article starts here...
Company Overview
Deere & Co (DE, Financial) is the world's leading manufacturer of agricultural equipment, producing some of the most recognizable machines in the heavy machinery industry in their green and yellow livery. The company is divided into four reportable segments: production and precision agriculture, small agriculture and turf, construction and forestry, and John Deere Capital. Its products are available through an extensive dealer network, which includes over 2,000 dealer locations in North America and approximately 3,700 locations globally. John Deere Capital provides retail financing for machinery to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Deere product sales.
Performance Summary
For the third quarter ended July 28, 2024, Deere & Co (DE, Financial) reported net income of $1.734 billion, or $6.29 per share, compared with net income of $2.978 billion, or $10.20 per share, for the same period last year. This represents a 42% decline in net income year-over-year. Despite this, the earnings per share (EPS) of $6.29 surpassed the analyst estimate of $5.85.
However, the company faced challenges with a 17% decrease in worldwide net sales and revenues, which amounted to $13.152 billion for the quarter, falling short of the estimated revenue of $13,944.22 million. For the first nine months of the year, net income attributable to Deere & Co was $5.855 billion, or $21.04 per share, compared with $7.797 billion, or $26.35 per share, for the same period last year.
Segment Performance
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | % Change | Operating Profit (Q3 2024) | Operating Profit (Q3 2023) | % Change |
|---|---|---|---|---|---|---|
| Production & Precision Agriculture | $5,099 million | $6,806 million | -25% | $1,162 million | $1,782 million | -35% |
| Small Agriculture & Turf | $3,053 million | $3,739 million | -18% | $496 million | $732 million | -32% |
| Construction & Forestry | $3,235 million | $3,739 million | -13% | $448 million | $716 million | -37% |
Financial Achievements and Challenges
Deere & Co (DE, Financial) has demonstrated resilience in the face of challenging conditions in the global agricultural and construction sectors. The company has taken steps to reduce costs and strategically align its production with customer needs. Despite these efforts, the company faced significant headwinds, including lower shipment volumes and higher warranty expenses.
“John Deere’s third-quarter results showcase our disciplined execution in the face of challenging conditions in the global agricultural and construction sectors,” said John C. May, chairman and chief executive officer. “Despite facing significant headwinds, our teams have demonstrated resiliency in adapting to market fluctuations, allowing us to remain focused on advancing our strategy and consistently providing exceptional value to our customers.”
Income Statement Highlights
For the third quarter of 2024, net sales were $11.387 billion, compared with $14.284 billion in the same period last year. The decline in net sales was primarily driven by lower shipment volumes across all segments. Operating profit for the quarter also saw a decline, with the Production & Precision Agriculture segment experiencing a 35% decrease in operating profit due to lower shipment volumes and employee-separation programs’ expenses.
Balance Sheet and Cash Flow
Deere & Co (DE, Financial) reported a decrease in net income for the first nine months of 2024, amounting to $5.855 billion, compared with $7.797 billion for the same period last year. The company’s financial services segment also saw a decline in net income due to a higher provision for credit losses and less-favorable financing spreads.
Outlook
Looking ahead, Deere & Co (DE, Financial) forecasts net income attributable to the company for fiscal 2024 to be approximately $7.0 billion. The company remains committed to its strategy of providing innovative, high-quality products and solutions to its customers, despite the challenging market conditions.
“In response to weak market conditions, we have taken steps to reduce costs and strategically align our production with customer needs,” said May. “Although these decisions were difficult, they are vital for our continued success and competitiveness. Our commitment to our customers is at the heart of everything we do, and we are confident that these proactive measures will allow us to continue investing in innovative, high-quality products and solutions that improve our customers’ lives.”
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Deere & Co for further details.
