Financial Data and Key Metrics Changes - Net sales and revenues decreased by 17% to $13.152 billion, while net sales for equipment operations fell by 20% to $11.387 billion [9] - Net income attributable to Deere & Company was $1.734 billion, equating to $6.29 per diluted share [9] - Equipment operations margin stood at 18.5% [8] Business Segment Data and Key Metrics Changes - **Production and Precision Ag**: Net sales were $5.099 billion, down 25% year-over-year, with an operating profit of $1.162 billion and a 22.8% operating margin [10] - **Small Ag & Turf**: Net sales decreased by 18% to $3.053 billion, with an operating profit of $496 million and a 16.2% operating margin [11] - **Construction and Forestry**: Net sales fell by 13% to $3.235 billion, with an operating profit of $448 million and a 13.8% operating margin [15] Market Data and Key Metrics Changes - U.S. and Canada large Ag equipment industry sales are expected to decline approximately 15% [12] - In Europe, industry sales are forecasted to decrease by about 15% due to yield headwinds [13] - South America anticipates a decline in tractor and combine sales between 15% and 20% [13] - Asia's industry sales are projected to be down moderately [14] Company Strategy and Development Direction - The company is focusing on proactive inventory and cost management to navigate challenging market conditions [8] - Adjustments in production schedules are being made to align inventory levels with market demand [20] - The company aims to leverage precision solutions and technology to enhance customer value and operational efficiency [23] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are facing headwinds from softer commodity prices and elevated interest rates, impacting equipment demand [20] - There is optimism regarding future opportunities, particularly in precision agriculture and sustainable operations [23] - The company is committed to maintaining competitiveness through disciplined cost control and strategic partnerships [20][21] Other Important Information - The Worldwide Financial Services net income was $153 million, impacted by higher provisions for credit losses [17] - The company announced a strategic investment in Banco Bradesco to become 50% owners of its Brazilian financing subsidiary [18] - The company expects net income for fiscal year 2024 to be approximately $7 billion [19] Q&A Session Summary Question: Pricing assumptions for 2024 in precision and production Ag - Management explained that the increase in price assumptions was due to stabilization in the market and reduced need for incentives [55][56] Question: Underproduction strategy in the Construction segment - Management confirmed a mid-single-digit underproduction strategy to align with demand and manage inventory levels [59][60] Question: Pricing dynamics in the construction segment - Management noted increased price competition and a reduction in the full-year pricing guide to 0.5 points for 2024 [63][65] Question: Fourth quarter earnings guidance and seasonality - Management clarified that the fourth quarter's performance would not be indicative of the following quarters due to significant underproduction [71][74] Question: Inventory to sales ratio and demand - Management provided insights on maintaining inventory levels and the strategy to achieve a target inventory to sales ratio [78]

Nicholas SmithSometimes, it is enough to release a "not too bad" report to have investors cheer. This is the case with Deere's Q3 earnings. Deere (NYSE:DE) was trading near its 52-week lows as the market was pricing in the bad news coming from its peers, mainly AGCO (AGCO) and CNH Industrial (CNH). After all, as I showed in detail in one of my past analyses on Deere, the business is cyclical, and it is strictly related to farmer net income and corn prices. Since corn is quickly going down, so is farmer ...

Deere & Company (DE) reported third-quarter fiscal 2024 (ended Jul 28) earnings of $6.29 per share, which beat the Zacks Consensus Estimate of $5.80. The bottom line, however, plunged 38% from the prior year quarter.This was mainly due to lower shipment volumes across all segments, reflecting weak demand. This was somewhat negated by the company’s pricing strategies and cost-saving measures.Net sales of equipment operations (comprising Agriculture, and Turf, Construction and Forestry) were $11.39 billion, d ...

For the quarter ended July 2024, Deere (DE) reported revenue of $11.39 billion, down 20.3% over the same period last year. EPS came in at $6.29, compared to $10.20 in the year-ago quarter.The reported revenue represents a surprise of +4.73% over the Zacks Consensus Estimate of $10.87 billion. With the consensus EPS estimate being $5.80, the EPS surprise was +8.45%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectati ...

Key TakeawaysDeere reported third-quarter earnings Thursday that fell year-over-year, but still managed to beat analyst estimates.CEO John May said the company faced "challenging conditions" and "significant headwinds" in the agriculture and construction industries.Deere said it expects sales to come in 10% to 25% lower for the full fiscal year. Deere & Company (DE) reported third-quarter earnings that beat expectations, despite a year-over-year decline as the company faced "significant headwinds" in the ag ...

Core Viewpoint - Deere's stock is currently undervalued, having declined 20% over the past year, despite the industrial sector's overall growth of 14% [1] Group 1: Business Overview - Deere operates a complex business model that includes various segments such as production and precision agriculture (45% of sales), construction and forestry (24%), and small agriculture and turf (23%) [2] - The majority of Deere's sales are business-to-business, indicating a focus on commercial clients rather than individual consumers [2] Group 2: Market Dynamics - Deere's performance is influenced by the capital spending cycle, where low interest rates and high commodity prices can lead to increased customer investments, while high borrowing costs can result in delayed purchases [3] - Input costs such as fuel and fertilizer also impact profitability, particularly in the construction segment, which is sensitive to real estate trends [3] Group 3: Innovation and Competitive Advantage - Deere has made strides to reduce business cyclicality through software solutions like the John Deere Operations Center, which enhances customer data management and operational efficiency [4] - Long-term competitive advantages include innovation, a robust global supply chain, and pricing power, which can help Deere differentiate itself from competitors [5] Group 4: Valuation and Shareholder Returns - Deere's current price-to-earnings (P/E) ratio stands at 10.4, indicating a low valuation relative to its earnings growth, with a potential P/E of around 20 even if earnings were to fall by 50% [6] - Over the past decade, Deere has increased its dividend by 145% while reducing its share count by over 20% through buybacks, resulting in a low payout ratio of 16% [6][7] Group 5: Investment Outlook - Deere is positioned as a strong long-term investment due to its industry leadership, capital efficiency, and commitment to shareholder returns through dividends and buybacks [8] - Despite potential short-term earnings declines, the stock presents a compelling buying opportunity for long-term investors [9]

Key TakeawaysDeere reported third-quarter earnings Thursday that fell year-over-year, but still managed to beat analyst estimates.CEO John May said the company faced "challenging conditions" and "significant headwinds" in the agriculture and construction industries.Deere said it expects sales to come in 10% to 25% lower for the full fiscal year. Deere & Company (DE) reported third-quarter earnings that beat expectations, despite a year-over-year decline as the company faced "significant headwinds" in the ag ...

Company Performance - Deere reported quarterly earnings of $6.29 per share, exceeding the Zacks Consensus Estimate of $5.80 per share, but down from $10.20 per share a year ago, indicating an earnings surprise of 8.45% [1] - The company achieved revenues of $11.39 billion for the quarter ended July 2024, surpassing the Zacks Consensus Estimate by 4.73%, compared to $14.28 billion in the same quarter last year [1] - Over the last four quarters, Deere has consistently surpassed consensus EPS and revenue estimates [1] Stock Outlook - The stock has underperformed, losing approximately 12.2% since the beginning of the year, while the S&P 500 has gained 14.4% [2] - The current consensus EPS estimate for the upcoming quarter is $4.65 on revenues of $10.16 billion, and for the current fiscal year, it is $25.31 on revenues of $45.17 billion [4] Industry Context - The Manufacturing - Farm Equipment industry, to which Deere belongs, is currently ranked in the bottom 5% of over 250 Zacks industries, which may negatively impact stock performance [5] - The performance of Deere's stock may also be influenced by the overall outlook for the industry [5]

Strong ag margins highlight continued value delivery amid market fluctuations.Global ag fundamentals are expected to remain weak as construction moderates.Full-year net income forecast unchanged despite challenging environment.MOLINE, Ill., Aug. 15, 2024 /PRNewswire/ -- Deere & Company reported net income of $1.734 billion for the third quarter ended July 28, 2024, or $6.29 per share, compared with net income of $2.978 billion, or $10.20 per share, for the quarter ended July 30, 2023. For the first nine mon ...

News Release Contact: Jen Hartmann Director, Public Relations HartmannJenniferA@JohnDeere.com Deere Reports Third Quarter Net Income of $1.734 Billion ● Strong ag margins highlight continued value delivery amid market fluctuations. ● Global ag fundamentals are expected to remain weak as construction moderates. ● Full-year net income forecast unchanged despite challenging environment. MOLINE, Illinois (August 15, 2024) — Deere & Company reported net income of $1.734 billion for the third quarter ended July 2 ...