10-KPeriod: FY2024

DEERE & CO Annual Report, Year Ended Oct 27, 2024

Filed December 12, 2024For Securities:DE

Summary

Deere & Company's (DE) 10-K filing for the period ending October 26, 2024, indicates a challenging fiscal year with a decline in net income and sales across its equipment segments, primarily attributed to unfavorable market conditions including high interest rates and excess inventory. The company is navigating a cyclical downturn in the agricultural sector and a slowdown in construction, projecting a decline in sales for both segments in fiscal year 2025. Despite these headwinds, Deere is focused on structural profitability and strategic investments in technology, such as its Smart Industrial Operating Model and Leap Ambitions, to drive long-term value. The company continues to manage costs through measures like workforce reductions and is committed to returning capital to shareholders through dividends and share repurchases, though the pace of repurchases has been managed in light of the current economic environment.

Financial Highlights

26 data points
Beta

Revenue

$51.72B

Net Income

$7.10B

13.7% Net Margin

EPS (Diluted)

$25.62

Free Cash Flow

$7.59B

Financial Statements
Beta
Revenue$51.72B
R&D Expenses$2.29B
SG&A Expenses$4.84B
Operating Expenses$42.51B
Operating Income$9.04B
Interest Expense$3.35B
Net Income$7.10B
EPS (Basic)$25.73
EPS (Diluted)$25.62
Shares Outstanding (Basic)276.00M
Shares Outstanding (Diluted)277.10M

Key Highlights

  • 1Net income and sales decreased in fiscal year 2024 compared to 2023 due to deteriorating market conditions in agriculture and construction.
  • 2Deere anticipates further declines in agriculture and turf, and construction and forestry equipment sales for fiscal year 2025.
  • 3Elevated interest rates and farmer liquidity concerns are impacting demand in North American agriculture markets.
  • 4The company is focusing on cost reduction measures and strategic investments in technology to maintain profitability and drive future growth.
  • 5Deere repurchased $4.0 billion of its common stock in fiscal year 2024 and maintained its dividend payments, demonstrating a commitment to shareholder returns.
  • 6The financial services segment saw an increase in net income, driven by higher financing receivables and rates, though this was partially offset by increased provision for credit losses and less favorable financing spreads.
  • 7The company's outlook for fiscal year 2025 includes projected declines in most equipment segments, with only global roadbuilding markets expected to be flat.

Frequently Asked Questions

Deere's declining sales and net income in fiscal year 2024 were primarily driven by unfavorable market conditions, including a cyclical downturn in the agricultural sector, high interest rates impacting customer demand, and elevated inventory levels. These factors led to lower sales volumes across its equipment segments.

Deere projects a decline in agriculture and turf equipment sales for fiscal year 2025 due to moderating demand in key markets like the U.S. and Canada, alongside deteriorating farm fundamentals in Europe. Construction and forestry equipment sales are also expected to decline, with healthy end markets being offset by continued uncertainty in equipment purchases, though global roadbuilding markets are anticipated to be flat.

Deere is implementing cost reduction measures, including employee-separation programs, to manage profitability. Strategically, the company is continuing to invest in technology and its Smart Industrial Operating Model and Leap Ambitions, focusing on precision technologies, automation, and alternative power solutions to enhance customer value and long-term competitiveness.

Deere remains committed to returning capital to shareholders through regular quarterly cash dividends and share repurchases. While share repurchases were managed in fiscal year 2024 due to the economic environment, the company still repurchased a significant amount of its common stock and continues to evaluate share repurchases as a means of deploying excess cash.