Summary
Deere & Company's (DE) third-quarter and nine-month fiscal year 2024 results show a notable decrease in net sales and net income compared to the prior year. This decline is primarily attributed to lower sales volumes across its Production and Precision Agriculture (PPA), Small Agriculture and Turf (SAT), and Construction and Forestry (CF) segments. Factors such as moderating agricultural fundamentals, rising interest rates, and inventory management have impacted demand. Despite the top-line and bottom-line contraction, the company continues to invest in technology and its Smart Industrial Operating Model. The Financial Services segment showed revenue growth but faced challenges with increased provisions for credit losses and less favorable financing spreads. Deere is actively managing its operational efficiency, implementing employee-separation programs aimed at reducing costs and aligning with strategic priorities. The company also announced plans to sell a 50% stake in its Brazilian financial services subsidiary, Banco John Deere S.A., as part of a strategic move to reduce risk in the Brazilian market. While facing headwinds in its core equipment businesses, Deere remains focused on long-term growth drivers like technology integration and lifecycle solutions.
Financial Highlights
39 data points| Revenue | $13.15B |
| R&D Expenses | $567.00M |
| SG&A Expenses | $1.28B |
| Operating Expenses | $10.80B |
| Interest Expense | $840.00M |
| Net Income | $1.73B |
| EPS (Basic) | $6.32 |
| EPS (Diluted) | $6.29 |
| Shares Outstanding (Basic) | 274.50M |
| Shares Outstanding (Diluted) | 275.60M |
Key Highlights
- 1Net sales decreased by 17% in the third quarter and 11% year-to-date, driven by lower sales volumes across PPA, SAT, and CF segments.
- 2Net income attributable to Deere & Company decreased by 42% in the third quarter and 25% year-to-date, reflecting lower sales and increased operating expenses.
- 3The company announced employee-separation programs estimated to cost $150 million pretax, with $124 million recognized in the third quarter, expected to yield annual pretax savings of $230 million.
- 4Deere is planning to sell a 50% stake in its Brazilian financial services subsidiary, Banco John Deere S.A. (BJD), to Banco Bradesco S.A., with the transaction expected in Q2 2025.
- 5Financial Services segment revenue increased by 15% in the third quarter and 21% year-to-date, though net income saw a decrease due to higher credit loss provisions and reduced financing spreads.
- 6The company continues to invest in technology and its Smart Industrial Operating Model and Leap Ambitions, despite moderating demand in agriculture and turf markets.
- 7Total debt increased by approximately $2.44 billion in the first nine months of 2024, reflecting the need to fund receivable and lease portfolios.