Deere's Net Income Plummets by 42%

By Tamara Parker • Thursday, August 15 07:53 • Permanent Link

Deere & Company reported a significant decline in net income for the third quarter ended July 28, 2024, compared to the same period in 2023. Specifically, net income decreased by 42% to $1.734 billion, with a corresponding decline in fully diluted earnings per share to $6.29 from $10.20 in 2023.

Worldwide net sales and revenues also took a hit, decreasing by 17% to $13.152 billion for the third quarter of 2024, and by 11% to $40.572 billion for the first nine months of the year. Net sales for the quarter were $11.387 billion, down from $14.284 billion in the same period last year.

The company's operating segments saw declines across the board. Production & Precision Agriculture net sales decreased by 25% to $5.099 billion, with operating profit declining by 35% to $1.162 billion. Small Agriculture & Turf net sales decreased by 18% to $3.053 billion, leading to a 32% drop in operating profit to $496 million. Construction & Forestry net sales decreased by 13% to $3.235 billion, with operating profit declining by 37% to $448 million.

In the financial services segment, net income for the quarter decreased by 29% to $153 million primarily due to a higher provision for credit losses and less-favorable financing spreads.

Looking ahead, the company forecasts its full-year net income to be approximately $7.0 billion for fiscal 2024, unchanged despite the challenging environment. The outlook for various segments in fiscal 2024 also reflects anticipated declines, with net sales for Production & Precision Agriculture and Small Agriculture & Turf expected to be down 20% to 25%, and net sales for Construction & Forestry anticipated to be down 10% to 15%.

The company remains committed to providing value to its customers and is taking proactive measures to reduce costs and align production with customer needs. Despite the difficult market conditions, Deere & Company aims to continue investing in innovative, high-quality products and solutions to improve its customers' lives. The market has reacted to these announcements by moving the company's shares 0.2% to a price of $351.28. For the full picture, make sure to review Deere &'s 8-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.