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 $5.86 billion, 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 cost and inventory management, including production cuts 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 for Q3 2024 were $11.387 billion, down 20% year-over-year; operating profit was $2.297 billion, down 35%.

• Q3 2024 diluted EPS was $6.29, down from $10.20 in Q3 2023; net income margin for the quarter was approximately 13.2%.

• Cash and cash equivalents at quarter-end were $7.004 billion; total external borrowings increased by $2.44 billion in the first nine months of 2024.

• Financial Services Q3 net income was $153 million, down 29% year-over-year due to higher credit loss provisions and less favorable financing spreads.

• $3.23 billion in share repurchases and $1.22 billion in dividends paid in the first nine months of 2024.

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; capital expenditures for the year estimated at $1.85 billion.

• Production & Precision Ag and Small Ag & Turf net sales expected down 20–25% for the full year; Construction & Forestry net sales expected down 10–15%.

• Financial Services net income forecasted at ~$720 million for 2024.

• Annual pretax savings from employee-separation programs estimated at $230 million, with $100 million expected in 2024.