Deere & Company (DE) Q3 2024 earnings summary

Executive summary

• Net sales and revenues for Q3 2024 were $13.152 billion, down 17% year-over-year; net income attributable to the company was $1.734 billion ($6.29 per share), down 42% from Q3 2023.

• For the nine months ended July 28, 2024, net sales and revenues were $40.572 billion, down 11% year-over-year; net income was $5.855 billion ($21.04 per share), down 25%.

• Declines were driven by lower sales volumes across all equipment segments, impacted by reduced demand, higher interest rates, and moderating agricultural fundamentals.

• Disciplined inventory and cost management, including proactive production adjustments and workforce reductions, resulted in $124–150 million in separation expenses and are expected to yield $230 million in annual pretax savings.

• The company reclassified its Brazilian financial services business as held for sale, recording a $15 million pretax and after-tax loss; agreement reached for Banco Bradesco to acquire 50%.

Financial highlights

• Equipment operations net sales were $11.387 billion, down 20% year-over-year; operating profit for the quarter was $2.297 billion, down 35%.

• Production & Precision Ag net sales fell 25% to $5.099 billion; operating profit dropped 35% to $1.162 billion; margin 22.8%.

• Small Ag & Turf net sales declined 18% to $3.053 billion; operating profit decreased 32% to $496 million; margin 16.2%.

• Construction & Forestry net sales dropped 13% to $3.235 billion; operating profit fell 37% to $448 million; margin 13.8%.

• Financial Services net income was $153 million, down 29% due to higher credit loss provisions and less favorable financing spreads.

Outlook and guidance

• Fiscal 2024 net income outlook maintained at approximately $7.0 billion; effective tax rate guidance between 23% and 25%.

• Equipment operations cash flow projected at $6–6.5 billion; capex estimated at $1.8–1.85 billion.

• Production & Precision Ag and Small Ag & Turf net sales expected down 20–25% for the year, with operating margins of 20.5–21.5% and 13.5–14.5%, respectively.

• Construction & Forestry net sales forecasted down 10–15%, with a 15% operating margin.

• Financial Services net income outlook for 2024 is ~$720 million.