What is the primary reason for the year-over-year decrease in net income?

The primary reason for the decrease in net income was an increase in production costs, coupled with higher research and development expenses and supply chain challenges. These factors, along with UAW contract ratification costs, outweighed the benefits of price realization and increased shipment volumes in some segments.

How is the company managing supply chain disruptions and rising costs?

Deere & Company is actively managing these challenges through close collaboration with key suppliers to mitigate production issues. They are also implementing strategic price realization to offset some of the increased costs, while continuing to focus on delivering products to meet strong customer demand.

What is the significance of the acquisition of Kreisel Electric, Inc.?

The acquisition of Kreisel Electric, Inc., a battery technology provider, signifies Deere's strategic investment in electrification and future technologies. This acquisition is expected to contribute to the company's production and precision agriculture, small agriculture and turf, and construction and forestry segments, aligning with evolving market demands and sustainability goals.

What are the industry sales forecasts for Deere's key markets?

Industry sales for large agricultural machinery in the U.S. and Canada are forecasted to be up 20 percent. Construction equipment industry sales in the U.S. and Canada are expected to increase 5 to 10 percent. These positive forecasts suggest continued strong demand for Deere's products.

DE 10-Q Quarterly Report Q1 FY2022 — Revenue, Net Income, EPS

Summary

Deere & Company's (DE) first quarter fiscal year 2022 results showed a decrease in net income to $903 million from $1.224 billion in the prior year's comparable quarter, with diluted earnings per share falling to $2.92 from $3.87. This decline was primarily driven by increased production costs, supply chain challenges, and higher research and development expenses, partially offset by favorable price realization across its segments. Despite the year-over-year profit decline, overall net sales and revenues saw a modest increase of 5% to $9.569 billion, reflecting strong demand for its agricultural and construction equipment. The company continues to navigate a challenging operating environment characterized by persistent supply chain disruptions and inflationary pressures. Management highlighted ongoing efforts to mitigate these impacts through close collaboration with suppliers and strategic pricing adjustments. The acquisition of a majority stake in battery technology provider Kreisel Electric, Inc. in February 2022 signals Deere's commitment to future growth and technological advancement, particularly in electrification. Looking ahead, industry sales for large agricultural machinery and construction equipment are forecasted to increase, providing a positive outlook for demand, though managing production costs and supply chain efficiencies remain key priorities.

Financial Highlights

44 data points

Beta

Revenue

$9.57B

Net Income

$903.00M

0.1% Net Margin

EPS (Diluted)

$2.92

Total Assets

$79.61B

Cash & Equivalents

$4.47B

Free Cash Flow

-$2.75B

Financial Statements

Beta

Revenue	$9.57B
R&D Expenses	$402.00M
SG&A Expenses	$781.00M
Operating Expenses	$8.42B
Operating Income	$1.24B
Interest Expense	$229.00M
Net Income	$903.00M
EPS (Basic)	$2.94
EPS (Diluted)	$2.92
Shares Outstanding (Basic)	307.40M
Shares Outstanding (Diluted)	309.40M

Key Highlights

1Net sales increased by 5% to $9.569 billion for the quarter ended January 30, 2022, compared to $9.112 billion in the prior year.
2Net income attributable to Deere & Company decreased to $903 million ($2.92 per diluted share) from $1.224 billion ($3.87 per diluted share) year-over-year.
3Equipment Operations segment saw net sales increase by 6% to $8.531 billion, but operating profit declined 32% to $939 million due to higher production costs.
4Financial Services segment's net income increased 13% to $231 million, driven by a higher average portfolio balance, despite a slight decrease in revenue.
5The company incurred $90 million in UAW contract ratification bonus costs in the first quarter of fiscal year 2022.
6Deere & Company acquired a majority ownership in Kreisel Electric, Inc., a battery technology provider, in February 2022, signaling investment in future technologies.
7Total assets stood at $79.614 billion as of January 30, 2022, a slight increase from $75.480 billion as of January 31, 2021.

DEERE & CO Quarterly Report for Q1 Ended Jan 30, 2022

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions