Financial Performance - In fiscal year 2023, the Production and Precision Agriculture (PPA) segment generated net sales of 26,790million,a2222,002 million in fiscal year 2022[14]. - The Small Agriculture and Turf (SAT) segment reported net sales of 13,980millioninfiscalyear2023,reflectinga413,381 million in fiscal year 2022[16]. - The Construction and Forestry (CF) segment achieved net sales of 14,795million,accountingfor2714,795 million, an 18% increase from 12,534millioninfiscalyear2022[22].−Netincomeroseto2.073 billion in 2023, compared to 1.073billionin2022,reflectingstrongmarketconditions[120].−Netsalesforequipmentoperationsincreasedto26.790 billion in 2023, up 22% from 22.002billionin2022,drivenbystrongdemandandpricerealization[126].−Financialservicesrevenueroseby365.554 billion in 2023, driven by higher average financing rates and increased receivables[131]. - Net income attributable to Deere & Company was 9,547millionin2023,anincreasefrom6,251 million in 2022, marking a growth of 53%[160]. - Total income before income taxes was 48,232millionin2023,comparedto43,450 million in 2022, indicating an increase of 11%[159]. - The company reported a total number of shares repurchased in Q4 2023 of 6,479 thousand, with an average price per share of 410.43[100].StrategicInitiatives−ThecompanyaimstoenhancecustomervaluethroughitsSmartIndustrialOperatingModel,focusingonproductionsystems,technologystack,andlifecyclesolutions[9].−TheLeapAmbitionsframework,introducedinfiscalyear2022,targetseconomicvalueandsustainability,withgoalsrelatedtoworkforcesafety,productcircularity,andenvironmentalfootprint[9].−Thecompanyplanstointroduceelectricandhybrid−electricoptionsacrossitsproductfamilies,includingafullyautonomous,battery−poweredelectricagriculturaltractor[9].−TheacquisitionofSmartApply,Inc.infiscalyear2023aimstoimproveproductivityandoptimizeinputsforhigh−valuecropcustomers[16].−Thecompanyisfocusedonintegratingprecisiontechnologiesandconnectivitycapabilitiestosupportsustainabilitygoalsforitscustomers[16].−Thecompanycontinuestoinvestinadvancedtechnologyandintegratedagriculturalsolutionstoenhanceproductivityandsustainabilityforitscustomers[14].−Thecompanyiscommittedtodeliveringhybrid−electricandbatteryelectricequipmentsolutionstoreduceemissionswhilemaintainingperformance[22].−Thecompanyaimstoofferanelectricoptionineachturfandcompactutilitytractorproductfamilyby2026tocomplywithnewemissionsregulations[40].MarketConditionsandDemand−BacklogordersasofOctober29,2023,wereapproximately7.9 billion for the PPA segment and 3.3billionfortheSATsegment,downfrom9.7 billion and 4.6billion,respectively,inthepreviousyear[35].−TheCFsegmentbacklogorderswereapproximately6.4 billion as of October 29, 2023, compared to 8.2billionatthesametimelastyear[35].−Retaildemandforturfandutilityequipmentistypicallyhigherinthesecondandthirdfiscalquarters,influencingproductionandshipmentschedules[21].−Demandforlargeagriculturalequipmentisexpectedtodeclinein2024acrossNorthAmerica,Europe,andSouthAmerica[116].−Agriculturalfundamentalsareanticipatedtomoderatein2024duetolowercommoditypricesandelevatedinterestrates,despitedeclininginputcosts[116].OperationalChallenges−Thecompanyhasimplementedearlyorderprogramsforcertainequipment,offeringdiscountstocustomerswhoplaceordersinadvanceoftheuseseason[21].−Theconstructionandforestrysegmentaimstoaddressindustrychallengessuchasjobsitesafetyandskilledlaborshortagesthroughsmarttechnologysolutions[22].−Thecompanyisfacingrisksassociatedwithfluctuatingagriculturalcommodityprices,whichdirectlyaffectsalesofagriculturalequipment[58].−Thecompanyanticipatesthatchangesingovernmentfarmprogramsandpoliciescouldinfluencedemandforagriculturalequipment[55].−Thecompanyisexposedtocurrencyfluctuationsthatcanmateriallyaffectitsfinancialresultsduetoitsglobaloperations[58].−Thecompanymayencounterdifficultiesinintegratingacquisitionsandjointventures,whichcoulddelayanticipatedbenefits[61].−Thecompanyhasfacedchallengesinattractingandretainingqualifiedemployees,whichcouldimpairitsabilitytoexecuteitsbusinessstrategy[79].−Significantdisruptionstothesupplychainhaveledtoincreasedorderbacklogsandproductioninefficiencies,adverselyaffectingbusinessoperations[76].FinancialHealthandInvestments−Thecompany’sinternalcontroloverfinancialreportingwasdeemedeffectiveasofOctober29,2023[107].−Thecompanyhasastrategytoenhancemanufacturingefficiencythroughleaninitiativesanddigitallyconnectedfactoryprojects[27].−Thecompanyreportedfinanceandinterestincomeof636 million in 2023, significantly higher than 213millionin2022,showingagrowthof1983.7 billion in 2023, reflecting strong financial performance[137]. - The company has 21.2billioninpaymentsdueonborrowingsandsecuritizationborrowingsinthenextyear,alongwithinterestpaymentsof2.2 billion[139]. - The company’s credit ratings are A+ (Fitch), A2 (Moody's), and A (S&P), with stable or positive outlooks[138]. - The company repurchased common stock worth 7,216millionin2023,significantlyhigherthanthe3,597 million repurchased in 2022, representing a 100.5% increase[179]. Regulatory and Compliance Issues - The company is subject to stringent engine emission regulations, which may increase research and development costs and affect its ability to manufacture certain products[68]. - Compliance with emissions regulations has added to the cost of products, but the company does not expect a material impact from new California regulations on its business[40]. - The company is subject to complex and changing laws and regulations, which could increase compliance costs and adversely affect business operations[86]. - Ongoing legal proceedings, including a class action lawsuit regarding monopolization claims, could have a material adverse effect on the company's operations and financial results[90]. Research and Development - Research and development expenses increased by 14% to 2.177billionin2023,focusingonnewtechnologysolutionsandproductintroductions[123].−Thecompanyisinvestingsignificantlyinresearchanddevelopmentforprecisiontechnologysolutions,whichmaynotyieldthedesiredprofitabilityorsustainabilityoutcomesforcustomers[62].−Futurestrategiesincludetheintegrationofnewtechnologiessuchasautomationandmachinelearningtoenhanceprecisiontechnologysolutions[156].ShareholderReturns−Thecompanydeclareddividendspershareof5.05, an increase from 4.36inthepreviousyear[165].−ThecompanyhasasharerepurchaseplanannouncedinDecember2022tobuyupto18.0 billion of shares, with $13.0 billion remaining to be repurchased as of the end of Q4 2023[100]. - The maximum number of shares that may yet be purchased under the repurchase plan is 35.9 million[100].
John Deere(DE)2023-12-14 16:00