Skip to content
AnalystLens

DEERE & CO 8-K Report, Financial Results (Feb 15, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed February 15, 2024
Period End
February 15, 2024
Security
DE
In the record · 2016–202610-K1110-Q348-K164

DE filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 164 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’17Jun ’17
  2. Leadership change8-K · Sep ’22Sep ’22
  3. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed February 15, 2024. Cited figures are marked; the original filing is the authoritative source.

Deere & Company reported first-quarter fiscal 2024 net income attributable to the company of $1.751 billiona, or $6.23 per diluted share, down 11% from $1.959 billion, or $6.55 per share, a year earlier.

Consolidated net sales and revenues fell 4% to $12.185 billionb, with equipment net sales of $10.486 billion versus $11.402 billion. The decline was driven primarily by lower shipment volumes across Production & Precision Agriculture (net sales down 7%, operating margin 21.6%) and Small Agriculture & Turf (net sales down 19%, operating margin 13.4%), partially offset by price realization. Construction & Forestry sales were flat, though operating profit fell 9% on higher production costs.

Financial Services net income rose 12% to $207 millionc on a larger average portfolio, partially offset by less favorable financing spreads. Management guided fiscal 2024 net income attributable to Deere to $7.50 to $7.75 billion and expects fleet replenishment to moderate as agricultural fundamentals normalize from record 2022 and 2023 levels. Segment guidance calls for net sales declines of roughly 20% in Production & Precision Ag, 10 to 15% in Small Ag & Turf, and 5 to 10% in Construction & Forestry, with price realization of about 1.5% in each equipment segment.

Financial Services net income is forecast at approximately $770 milliond, up from $619 million in fiscal 2023 after a $135 million after-tax correction to financing incentive accounting recorded in Q2 2023. For investors, the key takeaways are that equipment volumes are normalizing from peak levels while margins remain structurally strong, and that the company is guiding to a meaningful earnings decline versus fiscal 2023 as the cycle turns.

Cash flow was weak in the quarter, with operating cash use of $908 million, driven by working capital changes, and interest expense rose sharply to $802 million from $479 million. Cash and equivalents declined to $5.1 billion from $7.5 billion at fiscal year-end.

02—Key points

Key Highlights

  1. Q1 fiscal 2024 net income of $1.751 billion ($6.23 per diluted share) declined 11% year over year from $1.959 billion ($6.55 per share).
  2. Net sales and revenues fell 4% to $12.185 billion, led by an 19% drop in Small Ag & Turf and a 7% drop in Production & Precision Ag, both on lower shipment volumes.
  3. Full-year fiscal 2024 net income guidance is $7.50 to $7.75 billion, with management expecting fleet replenishment to moderate from record 2022 and 2023 levels.
  4. Segment guidance calls for Production & Precision Ag net sales down about 20% and Small Ag & Turf down 10 to 15%, with Construction & Forestry down 5 to 10%.
  5. Operating margins remain strong, with Production & Precision Ag at 21.6% and Small Ag & Turf at 13.4%, though both declined year over year.
  6. Operating cash flow was negative $908 million in the quarter, and interest expense nearly doubled to $802 million, reflecting higher rates and borrowing.
  7. Financial Services net income rose 12% to $207 million, with fiscal 2024 forecast at about $770 million versus $619 million in fiscal 2023.

03—Questions

Frequently Asked Questions

  1. Why did Deere's earnings decline in the first quarter of fiscal 2024?

    Lower shipment volumes in the agriculture and turf segments were the main driver, with Small Ag & Turf net sales down 19% and Production & Precision Ag down 7%. Higher selling, administrative, general, and R&D expenses also weighed on operating profit. Price realization partially offset these pressures.

  2. What is Deere's full-year fiscal 2024 earnings outlook?

    Deere forecasts fiscal 2024 net income attributable to the company of $7.50 to $7.75 billion. Management expects fleet replenishment to moderate as agricultural fundamentals normalize from the record levels of 2022 and 2023.

  3. How is the agricultural market expected to perform in fiscal 2024?

    Deere expects U.S. and Canada large ag industry units to fall 10 to 15%, small ag and turf 5 to 10%, and Europe ag 10 to 15%. South America tractors and combines are expected down about 10%, and Asia down moderately.

  4. Is Deere's cash flow and balance sheet a concern for investors?

    Operating cash flow was negative $908 million in the quarter, driven largely by a $2.3 billion decline in accounts payable and accrued expenses. Cash and equivalents fell to $5.1 billion from $7.5 billion at year-end, and interest expense rose to $802 million from $479 million. Fiscal 2024 net operating cash flow is guided at $7.0 to $7.5 billion, and management emphasizes maintaining an A rating.

  5. How did Financial Services perform and what is expected?

    Financial Services net income rose 12% to $207 million on higher average portfolio balances, partially offset by less favorable financing spreads. Fiscal 2024 Financial Services net income is forecast at approximately $770 million, up from $619 million in fiscal 2023.

04—Continue

← View all 8-K filings