Deere & Co. Reports Fiscal Second-Quarter Results: Beat Expectations Amidst Agricultural Challenges

by Anna

Deere & Co., a renowned manufacturer of agricultural equipment, recently announced its fiscal second-quarter results, surpassing Wall Street’s expectations. However, the company revised its full-year profit forecast downwards for the second time, reflecting challenges in the agricultural sector.


Despite the positive performance, Deere revised its profit outlook to $7 billion, down from the previously projected range of $7.50 billion to $7.75 billion. This downward revision followed an earlier forecast of a profit between $7.75 billion and $8.25 billion for the year 2024.


In response to this adjustment, shares of Deere & Co. experienced a decline of more than 5% before Thursday’s market opening.

The U.S. Department of Agriculture’s projections for 2024 net farm income, a key measure of agricultural profits, paint a challenging picture. It anticipates a total of $116.1 billion, marking a significant 25.5% decrease from the previous year. Adjusted for inflation, this decline stands at 27.1%. Farmers are grappling with reduced prices for soybeans and corn, compounded by lower direct government payments and rising production costs.

For the three months ending April 28, Deere & Co. reported earnings of $2.37 billion, translating to $8.53 per share. This compares to $2.86 billion, or $9.65 per share, in the same period last year. Despite the decrease, the earnings comfortably exceeded analysts’ expectations of $7.86 per share, as per Zacks Investment Research.

Revenue for the Moline, Illinois-based company saw a 12% decline, amounting to $15.24 billion. However, adjusted revenue, which excludes finance and interest income, stood at $13.61 billion, surpassing Wall Street’s estimate of $13.26 billion.

In terms of revenue breakdown, the small agriculture and turf division, encompassing certain mid-size and small tractors and equipment, recorded a 23% decrease to $3.19 billion. Meanwhile, revenue for the production and precision agriculture unit, comprising large and certain mid-size tractors, combines, and related equipment, declined by 16% to $6.58 billion.

Deere’s fiscal second-quarter results underscore the challenges faced by the agricultural industry amidst shifting market dynamics. Despite the headwinds, the company’s resilience and ability to outperform expectations demonstrate its continued commitment to navigating these uncertainties while delivering value to shareholders.


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