Deere Q4 Earnings: Beats Expectations, Steep Sales Drop, Margins Squeeze & More

Deere & Co DE reported a fourth-quarter net sales and revenue decline of 28% year-over-year to $11.143 billion, beating the consensus of $9.335 billion.

Deere clocked an EPS of $4.55, down from $8.26 YoY, beating the consensus of $3.90.

Production & Precision Agriculture net sales declined 38% YoY to $4.305 billion, Small Agriculture & Turf net sales fell 25% to $2.306 billion, and Construction & Forestry revenue declined 29% to $2.664 billion due to lower shipment volumes.

Financial services revenues grew 13% year over year to $1.522 billion. Net income declined to $173 million from $190 million a year ago due to higher credit loss provisions, partially offset by portfolio income, lower SA&G expenses, and valuation gains.

Operating profit fell 52.1% YoY to $1.45 billion, and margin contracted by 661 bps to 13%. Segment operating margins: Production & Precision Agriculture 15.3%, down YoY from 26.4%; Small Agriculture & Turf 10.1%, down YoY from 14.4%; Construction & Forestry 12.3%, down YoY from 13.8%.

As of October 27, Deere held $8.5 billion in cash and equivalents. DE’s net cash provided by operating activities for the fiscal was $9.231 billion, compared to $8.589 billion a year ago.

In the third quarter, the company launched employee-separation programs across the U.S., Europe, Asia, and Latin America to align with strategic priorities and reduce redundancies. These largely involuntary programs incurred $157 million pretax ($124 million after-tax) in 2024, with $130 million paid.

“Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment. Together with the structural improvements made over the past several years, these adjustments enable us to serve our customers more effectively and achieve strong results across the business cycle,” commented John May, chairman and CEO of Deere.

Guidance: Deere projects fiscal 2025 net income to be between $5.0 billion and $5.5 billion. For fiscal-year 2024, net income attributable to Deere was $7.100 billion.

The company said it remains committed to making investments that enhance customer productivity and profitability.

Price Action: DE shares traded higher by 1.49% at $411.00 premarket at the last check Thursday.

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