Why Machinery Maker Deere Shares Are Diving Today

Deere & Co DE shares are trading lower by around 5% after it reported Q4 FY23 results.

Net sales and revenue fell 1% Y/Y to $15.41 billion, beating the consensus of $13.69 billion.

Production & Precision Agriculture revenue declined 6% Y/Y to $6.97 billion, and Small Agriculture & Turf revenue decreased by 13% Y/Y to $3.09 billion, both due to lower shipment volumes.

Meanwhile, Construction & Forestry revenue improved by 11% Y/Y to $3.74 billion due to price realization and increased shipment volumes.

Operating profit grew 2% Y/Y to $3.03 billion, led by growth of 6% Y/Y in Production & Precision and 25% Y/Y in Construction & Forestry segments.

EPS of $8.26 surpassed the consensus of $7.47.

Deere held over $8.4 billion in cash and cash equivalents as of October 29, 2023.

FY24 Guidance: Deere expects a net income of $7.75 billion-$8.25 billion, with volumes returning to mid-cycle levels.

The company expects Production & Precision Ag net sales to decline by 15%- 20% and price realization of +1.5%; Small Ag & Turf net sales growth to fall by 10%-15% and price realization of +1.0%; and Construction & Forestry net sales growth to decrease by ~10% and price realization of +1.5%.

John C. May, chairman and CEO said, "While our end markets will fluctuate, we remain focused on disciplined execution and strategically investing in solutions that drive customer value. As evidenced by our guidance for 2024, we are demonstrating higher levels of through-cycle structural profitability while making our company more resilient and better equipped for the future."

Also Read: Deere Gears Up For Q4 Print; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call

Price Action: DE shares are down 5.25% at $362.55 premarket on the last check Wednesday.

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