Deere Excels Q3 Earnings Estimates; Lifts Annual Profit Outlook

Deere & Co DE reported Q3 FY23 net sales and revenue growth of 12% Y/Y to $15.80 billion, beating the consensus of $14.25 billion.

Production & Precision Agriculture revenue grew by 12% Y/Y to $6.81 billion from higher price realization.

Small Agriculture & Turf revenue increased by 3% Y/Y to $3.74 billion.

Construction & Forestry revenue improved by 14% Y/Y to $3.74 billion due to price realization and higher shipment volumes.

Operating profit grew 33% Y/Y to $3.52 billion, led by growth across all segments.

EPS of $10.20 surpassed the consensus of $8.20.

Deere held over $7.4 billion in cash and cash equivalents as of July 30, 2023.

Guidance: Deere raised its FY23 outlook for net income to $9.75 billion-$10.00 billion from $9.25 billion-$9.50 billion.

The company expects FY23 Production & Precision Ag net sales growth of ~ 20% and price realization of +15%, Small Ag & Turf net sales growth of up ~ 5% and price realization of +9%, and Construction & Forestry net sales growth of up ~ 15%-20% and price realization of +11%.

"Deere is well on the way to another year of exceptional achievement due in large part to positive fundamentals in the farm and construction sectors and the unwavering commitment of the Deere team, including our dealers and suppliers. Fundamentals are expected to continue fueling solid demand for our equipment, supported by a strong advance-order position. At the same time, through the company's smart industrial operating model, we are delivering differentiated value to our customers, enabling them to do their jobs more profitably and sustainably," said John C. May, chairman, and chief executive officer.

Price Action: DE shares are trading lower by 2.42% at $409.00 premarket on the last check Friday.

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