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DEERE & CO 8-K Report, Financial Results (Nov 21, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed November 21, 2024
Period End
November 21, 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 November 21, 2024. Cited figures are marked; the original filing is the authoritative source.

Deere & Company reported fourth-quarter fiscal 2024 net income attributable to the company of $1.245 billiona, or $4.55 per diluted share, down 47% from $2.369 billion ($8.26) a year earlier.

Worldwide net sales and revenues fell 28% to $11.143 billionb. For the full fiscal year, net income was $7.100 billion ($25.62 per share), down 30%, and net sales and revenues declined 16% to $51.716 billion. Equipment net sales fell 38% in Production & Precision Ag and 25% in Small Ag & Turf and 29% in Construction & Forestry in the quarter, driven mainly by lower shipment volumes.

Operating profit for the quarter dropped sharply across the equipment segments, while Financial Services net income was roughly flat at $173 millionc. Management guided fiscal 2025 net income attributable to Deere to $5.0 to $5.5 billion, implying further meaningful declines from fiscal 2024. The outlook calls for Production & Precision Ag net sales down about 15% and Small Ag & Turf and Construction & Forestry sales down about 10% and 10% to 15%, respectively.

Industry forecasts point to weaker demand in U.S. and Canadian large ag (down about 30%) and small ag and turf (down about 10%), with Europe down 5 to 10%. Financial Services net income is projected at about $750 milliond, and equipment operations net operating cash flow is expected at $4.5 to $5.5 billion.

The quarter included several special items: a $57 million pretax gain from patent legal settlements, a $28 million impairment charge on an investment, $157 million of pretax employee-separation program expenses (with about $220 million in annual savings targeted), and a $59 million fiscal-year loss tied to the planned 50% sale of Banco John Deere S.A. to Bradesco, with the valuation allowance increasing to $97 million. Management reiterated its commitment to an "A" credit rating, continued investment in products and precision technology, and its capital priorities of dividends and share repurchases, which were reduced to $4.0 billion in fiscal 2024 from $7.2 billion in fiscal 2023.

02—Key points

Key Highlights

  1. Q4 FY2024 net income of $1.245 billion ($4.55/diluted share), down 47% year over year; full-year net income of $7.100 billion ($25.62/share), down 30%.
  2. Q4 net sales and revenues fell 28% to $11.143 billion; full-year revenues declined 16% to $51.716 billion, with equipment net sales down 19% for the year.
  3. Fiscal 2025 net income guidance of $5.0 to $5.5 billion signals continued earnings decline as ag and construction markets weaken.
  4. Production & Precision Ag Q4 operating margin compressed to 15.3% from 26.4%, with segment net sales down 38% on lower shipment volumes.
  5. Fiscal 2025 outlook: U.S. and Canada large ag industry down about 30%, small ag and turf down about 10%, and Production & Precision Ag net sales down about 15%.
  6. Special items included a $57 million patent settlement gain, $157 million in employee-separation costs targeting $220 million in annual savings, and a $59 million loss on the Banco John Deere held-for-sale valuation.
  7. Share repurchases were reduced to $4.0 billion in fiscal 2024 from $7.2 billion in fiscal 2023, while the company maintained its commitment to an "A" rating and a 25-35% dividend payout target on mid-cycle earnings.

03—Questions

Frequently Asked Questions

  1. How much did Deere's earnings decline in the fourth quarter and full year of fiscal 2024?

    Q4 net income attributable to Deere fell 47% to $1.245 billion ($4.55 per diluted share) from $2.369 billion ($8.26). Full-year net income fell 30% to $7.100 billion ($25.62 per share) from $10.166 billion ($34.63).

  2. What is Deere's earnings outlook for fiscal 2025?

    Management forecasts fiscal 2025 net income attributable to Deere of $5.0 to $5.5 billion, a further decline from fiscal 2024's $7.1 billion, reflecting ongoing market headwinds across agriculture and construction.

  3. Why did sales drop so sharply in the quarter?

    The company attributed the decline primarily to lower shipment volumes across all equipment segments. Production & Precision Ag sales fell 38%, Small Ag & Turf fell 25%, and Construction & Forestry fell 29%, partially offset by price realization in some segments.

  4. Were there any one-time items affecting results?

    Yes. Q4 included a $57 million pretax legal settlement gain and a $28 million impairment charge, while the fiscal year included $157 million in employee-separation costs (expected to save about $220 million annually) and a $59 million loss on the planned sale of 50% of Banco John Deere to Bradesco.

  5. How is Deere managing capital returns and its credit rating?

    Deere cut share repurchases to $4.0 billion in fiscal 2024 from $7.2 billion the prior year and continues to target an "A" credit rating, a 25-35% dividend payout on mid-cycle earnings, and funding of value-creating investments before buybacks.

04—Continue

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