Deere Reports Third Quarter Net Income of $1.734 Billion

Rhea-AI Summary

Deere & Company reported third-quarter net income of $1.734 billion, or $6.29 per share, down from $2.978 billion ($10.20 per share) in Q3 2023. Worldwide net sales and revenues decreased 17% to $13.152 billion. Despite challenging conditions in global agricultural and construction sectors, Deere maintains its full-year net income forecast of approximately $7.0 billion.

The company has taken steps to reduce costs and align production with customer needs in response to weak market conditions. Deere's outlook for fiscal 2024 projects decreased sales across all segments, with Production & Precision Ag and Small Ag & Turf both expected to be down 20% to 25%, while Construction & Forestry is projected to be down 10% to 15%.

Positive

• Maintained full-year net income forecast of $7.0 billion despite challenging conditions
• Strong agricultural margins showcasing disciplined execution
• Price realization partially offsetting lower shipment volumes in all segments
• Financial Services segment expecting higher net income in fiscal 2024 due to higher average portfolio balances

Negative

• Q3 net income decreased 42% year-over-year to $1.734 billion
• Worldwide net sales and revenues decreased 17% to $13.152 billion in Q3
• Production & Precision Agriculture sales decreased 25% due to lower shipment volumes
• Small Agriculture & Turf sales decreased 18% due to lower shipment volumes
• Construction & Forestry sales decreased 13% due to lower shipment volumes
• Financial Services net income for Q3 decreased 29% year-over-year
• Negative industry outlook for fiscal 2024 across all segments and regions

Insights

Financial Analyst

Deere's Q3 results reveal a significant decline in performance, with net income dropping 42% year-over-year to $1.734 billion. The 17% decrease in worldwide net sales and revenues to $13.152 billion reflects challenging market conditions across agricultural and construction sectors. Despite these headwinds, Deere maintains its full-year net income forecast of $7.0 billion, demonstrating resilience.

The company's Production & Precision Agriculture segment saw a 25% decrease in net sales and a 35% drop in operating profit, indicating substantial pressure on its core business. The Small Agriculture & Turf and Construction & Forestry segments also experienced double-digit declines in sales and operating profits. These results underscore the broad-based challenges Deere faces in its key markets.

Investors should note Deere's proactive cost-reduction measures and strategic production alignment, which could position the company well for a potential market recovery. However, the projected industry outlook for fiscal 2024 suggests continued headwinds, particularly in the U.S. & Canada large agriculture market, expected to be down 15%.

Market Research Analyst

Deere's Q3 results reflect a broader market slowdown in the agriculture and construction sectors. The company's outlook for fiscal 2024 paints a challenging picture across multiple geographies and product segments. Notably, the U.S. & Canada large agriculture market is projected to decline by 15%, while the South American tractor and combine market could see a 15-20% drop.

These projections suggest a cyclical downturn in Deere's core markets, likely driven by factors such as reduced farm incomes, lower commodity prices and economic uncertainties. The construction sector's outlook is slightly better but still negative, with U.S. & Canada construction equipment sales expected to decline 5-10%.

Despite these challenges, Deere's ability to maintain its full-year earnings forecast indicates effective cost management and pricing strategies. The company's focus on precision agriculture and innovative solutions could provide a competitive edge as the industry navigates this downturn.

• 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 months of the year, net income attributable to Deere & Company was $5.855 billion, or $21.04 per share, compared with $7.797 billion, or $26.35 per share, for the same period last year.

Worldwide net sales and revenues decreased 17 percent, to $13.152 billion, for the third quarter of 2024 and decreased 11 percent, to $40.572 billion, for nine months. Net sales were $11.387 billion for the quarter and $35.484 billion for nine months, compared with $14.284 billion and $41.765 billion last year, respectively.

"John Deere's third-quarter results showcase our disciplined execution in the face of challenging conditions in the global agricultural and construction sectors," said John C. May, chairman and chief executive officer. "Despite facing significant headwinds, our teams have demonstrated resiliency in adapting to market fluctuations, allowing us to remain focused on advancing our strategy and consistently providing exceptional value to our customers."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be approximately $7.0 billion.

"In response to weak market conditions, we have taken steps to reduce costs and strategically align our production with customer needs," said May. "Although these decisions were difficult, they are vital for our continued success and competitiveness. Our commitment to our customers is at the heart of everything we do, and we are confident that these proactive measures will allow us to continue investing in innovative, high-quality products and solutions that improve our customers' lives."

Deere & Company		Third Quarter								Year to Date
$ in millions, except per share amounts		2024			2023			% Change		2024			2023			% Change
Net sales and revenues		$	13,152		$	15,801		-17 %		$	40,572		$	45,839		-11 %
Net income		$	1,734		$	2,978		-42 %		$	5,855		$	7,797		-25 %
Fully diluted EPS		$	6.29		$	10.20				$	21.04		$	26.35

Results for the presented periods were affected by special items. See Note 1 of the financial statements for further details.

Production & Precision Agriculture		Third Quarter
$ in millions		2024			2023			% Change
Net sales		$	5,099		$	6,806		-25 %
Operating profit		$	1,162		$	1,782		-35 %
Operating margin			22.8 %			26.2 %

Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes and employee-separation programs' expenses, presented as a special item below. These factors were partially offset by price realization and lower warranty expenses.

 

Small Agriculture & Turf		Third Quarter
$ in millions		2024			2023			% Change
Net sales		$	3,053		$	3,739		-18 %
Operating profit		$	496		$	732		-32 %
Operating margin			16.2 %			19.6 %

Small agriculture and turf sales decreased for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased primarily due to lower shipment volumes and higher warranty expenses, partially offset by price realization.

 

Construction & Forestry		Third Quarter
$ in millions		2024			2023			% Change
Net sales		$	3,235		$	3,739		-13 %
Operating profit		$	448		$	716		-37 %
Operating margin			13.8 %			19.1 %

Construction and forestry sales decreased for the quarter due to lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix and unfavorable price realization.

 

Financial Services		Third Quarter
$ in millions		2024			2023			% Change
Net income		$	153		$	216		-29 %

Financial services net income for the quarter decreased due to a higher provision for credit losses and less-favorable financing spreads, partially offset by income earned on higher average portfolio balances and favorable discrete tax items.

Industry Outlook for Fiscal 2024
Agriculture & Turf
U.S. & Canada:
Large Ag						Down ~ 15%
Small Ag & Turf						Down ~ 10%
Europe						Down ~ 15%
South America (Tractors & Combines)						Down 15 to 20%
Asia						Down moderately
Construction & Forestry
U.S. & Canada:
Construction Equipment						Down 5 to 10%
Compact Construction Equipment						Flat to Down 5%
Global Forestry						Down ~ 10%
Global Roadbuilding						Flat to Down 5%

 

Deere Segment Outlook for Fiscal 2024				Currency		Price
$ in millions		Net Sales		Translation		Realization
Production & Precision Ag		Down 20% to 25%		~ Flat		Up ~ 2.0%
Small Ag & Turf		Down 20% to 25%		~ Flat		Up ~ 2.0%
Construction & Forestry		Down 10% to 15%		~ Flat		Up ~ 0.5%
Financial Services		Net Income		~$  720

Financial Services. Fiscal-year 2024 net income attributable to Deere & Company for the financial services operations is forecasted to be approximately $720 million. Results are expected to be higher than fiscal year 2023 due to income earned on higher average portfolio balances, partially offset by a higher provision for credit losses and less-favorable financing spreads. A correction of the accounting treatment for financing incentives offered to John Deere dealers impacted 2023 financial results. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," "Deere Segment Outlook," and "Condensed Notes to Interim Consolidated Financial Statements" relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

• changes in and compliance with U.S., foreign and international laws, regulations, and policies relating to trade, economic sanctions, data privacy, spending, taxing, banking, monetary, environmental (including climate change and engine emissions), and farming policies;
• political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the conflict in the Middle East;
• adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;
• worldwide demand for food and different forms of renewable energy;
• the ability to execute business strategies, including the company's Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions;
• the ability to understand and meet customers' changing expectations and demand for John Deere products and solutions;
• accurately forecasting customer demand for products and services and adequately managing inventory;
• the ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers;
• changes to governmental communications channels (radio frequency technology);
• the ability to adapt in highly competitive markets;
• dealer practices and their ability to manage inventory and distribution of John Deere products and to provide support and service precision technology solutions;
• changes in climate patterns, unfavorable weather events, and natural disasters;
• governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
• higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions;
• availability and price of raw materials, components, and whole goods;
• delays or disruptions in the company's supply chain;
• the company's equipment fails to perform as expected, which could result in warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations;
• the ability to attract, develop, engage, and retain qualified employees;
• the impact of workforce reductions on employee retention, morale, and institutional knowledge;
• security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products;
• loss of or challenges to intellectual property rights;
• legislation introduced or enacted that could affect the company's business model and intellectual property, such as right to repair or right to modify legislation;
• investigations, claims, lawsuits, or other legal proceedings;
• events that damage the company's reputation or brand, such as the recent social media campaign targeting the company's stance on certain social issues or the company's response thereto;
• the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, available farm acres, acreage planted, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and
• housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

Further information concerning the company and its businesses, including factors that could materially affect the financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the company's most recent Annual Report on Form 10‑K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

 

DEERE & COMPANY THIRD QUARTER 2024 PRESS RELEASE (In millions of dollars) Unaudited
		Three Months Ended								Nine Months Ended
		July 28			July 30			%		July 28			July 30			%
		2024			2023			Change		2024			2023			Change
Net sales and revenues:
Production & precision ag net sales		$	5,099		$	6,806		-25		$	16,529		$	19,826		-17
Small ag & turf net sales			3,053			3,739		-18			8,663			10,886		-20
Construction & forestry net sales			3,235			3,739		-13			10,292			11,053		-7
Financial services revenues			1,489			1,228		+21			4,259			3,375		+26
Other revenues			276			289		-4			829			699		+19
Total net sales and revenues		$	13,152		$	15,801		-17		$	40,572		$	45,839		-11
Operating profit: *
Production & precision ag		$	1,162		$	1,782		-35		$	3,857		$	5,160		-25
Small ag & turf			496			732		-32			1,393			2,028		-31
Construction & forestry			448			716		-37			1,682			2,179		-23
Financial services			191			286		-33			657			565		+16
Total operating profit			2,297			3,516		-35			7,589			9,932		-24
Reconciling items **			62			98		-37			111			29		+283
Income taxes			(625)			(636)		-2			(1,845)			(2,164)		-15
Net income attributable to Deere & Company		$	1,734		$	2,978		-42		$	5,855		$	7,797		-25

*	Operating profit is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes. Operating profit for financial services includes the effect of interest expense and foreign exchange gains or losses.
**	Reconciling items are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

 

DEERE & COMPANY STATEMENTS OF CONSOLIDATED INCOME For the Three and Nine Months Ended July 28, 2024 and July 30, 2023 (In millions of dollars and shares except per share amounts) Unaudited
		Three Months Ended						Nine Months Ended
		2024			2023			2024			2023
Net Sales and Revenues
Net sales		$	11,387		$	14,284		$	35,484		$	41,765
Finance and interest income			1,461			1,253			4,207			3,326
Other income			304			264			881			748
Total			13,152			15,801			40,572			45,839
Costs and Expenses
Cost of sales			7,848			9,624			24,205			28,288
Research and development expenses			567			528			1,664			1,571
Selling, administrative and general expenses			1,278			1,110			3,608			3,392
Interest expense			840			623			2,478			1,671
Other operating expenses			264			310			930			971
Total			10,797			12,195			32,885			35,893
Income of Consolidated Group before Income Taxes			2,355			3,606			7,687			9,946
Provision for income taxes			625			636			1,845			2,164
Income of Consolidated Group			1,730			2,970			5,842			7,782
Equity in income of unconsolidated affiliates			1			2			4			5
Net Income			1,731			2,972			5,846			7,787
Less: Net loss attributable to noncontrolling interests			(3)			(6)			(9)			(10)
Net Income Attributable to Deere & Company		$	1,734		$	2,978		$	5,855		$	7,797
Per Share Data
Basic		$	6.32		$	10.24		$	21.13		$	26.48
Diluted			6.29			10.20			21.04			26.35
Dividends declared			1.47			1.25			4.41			3.70
Dividends paid			1.47			1.25			4.29			3.58
Average Shares Outstanding
Basic			274.5			290.8			277.1			294.4
Diluted			275.6			292.1			278.2			295.9

See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In millions of dollars) Unaudited
		July 28			October 29			July 30
		2024			2023			2023
Assets
Cash and cash equivalents		$	7,004		$	7,458		$	6,576
Marketable securities			1,140			946			841
Trade accounts and notes receivable – net			7,469			7,739			9,297
Financing receivables – net			43,896			43,673			41,302
Financing receivables securitized – net			8,274			7,335			7,001
Other receivables			2,270			2,623			3,118
Equipment on operating leases – net			7,118			6,917			6,709
Inventories			7,696			8,160			9,350
Property and equipment – net			7,092			6,879			6,418
Goodwill			3,960			3,900			3,994
Other intangible assets – net			1,030			1,133			1,199
Retirement benefits			3,126			3,007			3,573
Deferred income taxes			1,898			1,814			1,360
Other assets			2,903			2,503			2,659
Assets held for sale			2,965
Total Assets		$	107,841		$	104,087		$	103,397
Liabilities and Stockholders' Equity
Liabilities
Short-term borrowings		$	15,294		$	17,939		$	17,143
Short-term securitization borrowings			7,869			6,995			6,608
Accounts payable and accrued expenses			14,397			16,130			15,340
Deferred income taxes			481			520			506
Long-term borrowings			42,692			38,477			38,112
Retirement benefits and other liabilities			2,156			2,140			2,536
Liabilities held for sale			1,803
Total liabilities			84,692			82,201			80,245
Redeemable noncontrolling interest			84			97			101
Stockholders' Equity
Total Deere & Company stockholders' equity			23,062			21,785			23,048
Noncontrolling interests			3			4			3
Total stockholders' equity			23,065			21,789			23,051
Total Liabilities and Stockholders' Equity		$	107,841		$	104,087		$	103,397

See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS For the Nine Months Ended July 28, 2024 and July 30, 2023 (In millions of dollars) Unaudited
		2024			2023
Cash Flows from Operating Activities
Net income		$	5,846		$	7,787
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses			222			(64)
Provision for depreciation and amortization			1,598			1,527
Impairments and other adjustments			53			173
Share-based compensation expense			159			112
Credit for deferred income taxes			(125)			(429)
Changes in assets and liabilities:
Receivables related to sales			(2,446)			(5,059)
Inventories			234			(663)
Accounts payable and accrued expenses			(1,015)			47
Accrued income taxes payable/receivable			31			(595)
Retirement benefits			(246)			(116)
Other			(172)			176
Net cash provided by operating activities			4,139			2,896
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)			19,143			17,592
Proceeds from maturities and sales of marketable securities			333			127
Proceeds from sales of equipment on operating leases			1,451			1,445
Cost of receivables acquired (excluding receivables related to sales)			(21,113)			(20,714)
Purchases of marketable securities			(572)			(213)
Purchases of property and equipment			(1,043)			(887)
Cost of equipment on operating leases acquired			(2,165)			(1,968)
Collateral on derivatives – net			390			240
Other			(95)			(185)
Net cash used for investing activities			(3,671)			(4,563)
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)			(992)			5,040
Proceeds from borrowings issued (original maturities greater than three months)			15,512			9,972
Payments of borrowings (original maturities greater than three months)			(10,792)			(5,862)
Repurchases of common stock			(3,227)			(4,663)
Dividends paid			(1,202)			(1,065)
Other			(88)			(43)
Net cash provided by (used for) financing activities			(789)			3,379
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			(6)			125
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			(327)			1,837
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			7,620			4,941
Cash, Cash Equivalents, and Restricted Cash at End of Period		$	7,293		$	6,778

See Condensed Notes to Interim Consolidated Financial Statements.

DEERE & COMPANY
Condensed Notes to Interim Consolidated Financial Statements
(In millions of dollars) Unaudited

(1)  Special Items

2024

Employee-Separation Programs

In the third quarter of 2024, the company implemented employee-separation programs for its salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs' main purpose was to help meet the company's strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period.

The total programs' pretax expenses are estimated to be approximately $150 million, with $124 million recorded in the third quarter of 2024. The remaining expenses are expected to be recorded primarily in 2025. The expenses for the three months and nine months ended July 28, 2024 were recorded as follows in millions of dollars:

		PPA			SAT			CF			FS			Total
Employee-Separation Programs:
Cost of sales		$	18		$	9		$	8					$	35
Research and development expenses			19			6			1						26
Selling, administrative and general expenses			25			14			11		$	9			59
Total operating profit decrease		$	62		$	29		$	20		$	9			120
Non-operating profit expenses*															4
Total														$	124

*Relates primarily to corporate expenses.

Annual pretax savings from these programs are estimated to be approximately $230 million, of which $100 million is estimated to be realized in 2024.

Banco John Deere

In the third quarter of 2024, the company's board of directors authorized the sale of 50 percent of the company's ownership in its wholly owned subsidiary, Banco John Deere S.A. (BJD). BJD, located in Brazil, is included in the company's financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. The transaction will reduce the company's incremental risk as it continues to grow in the Brazilian market. As a result, the company classified the BJD business as held for sale, including a reversal of $38 million in allowance for credit losses, and the establishment of a $53 million valuation allowance on the assets held for sale. The net impact of these entries was a pretax and after-tax loss of $15 million recorded in "Selling, administrative and general expenses."

In August 2024, the company entered into an agreement with a Brazilian bank, Banco Bradesco S.A., to invest and become 50 percent owner of BJD.

2023

Brazil Tax Ruling

In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed the company to record a $243 million reduction in the provision for income taxes and $47 million of interest income.

Financial Services Financing Incentives Correction

In the second quarter of 2023, the company corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023 in "Selling, administrative and general expenses" by financial services.

Summary of 2024 and 2023 Special Items

The following table summarizes the operating profit impact of the special items recorded in millions of dollars for the three months and nine months ended July 28, 2024 and July 30, 2023.

		Three Months															Nine Months
		PPA			SAT			CF			FS			Total			PPA			SAT			CF			FS			Total
2024 Expense:
Employee-separation programs		$	62		$	29		$	20		$	9		$	120		$	62		$	29		$	20		$	9		$	120
BJD remeasurement												15			15												15			15
Total 2024 expense			62			29			20			24			135			62			29			20			24			135
2023 Expense:
Financing incentives correction																											173			173
Period over period change		$	62		$	29		$	20		$	24		$	135		$	62		$	29		$	20		$	(149)		$	(38)

(2)   The consolidated financial statements represent the consolidation of all Deere & Company's subsidiaries. The supplemental consolidating data is presented for informational purposes. Transactions between the equipment operations and financial services have been eliminated to arrive at the consolidated financial statements. In the supplemental consolidating data in Note 3 to the financial statements, the "Equipment Operations" represents the enterprise without "Financial Services" which include the company's production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within "Financial Services."

DEERE & COMPANY (3) SUPPLEMENTAL CONSOLIDATING DATA STATEMENTS OF INCOME For the Three Months Ended July 28, 2024 and July 30, 2023 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2024			2023			2024			2023			2024			2023			2024			2023
Net Sales and Revenues
Net sales		$	11,387		$	14,284														$	11,387		$	14,284
Finance and interest income			155			210		$	1,537		$	1,335		$	(231)		$	(292)			1,461			1,253	1
Other income			246			222			130			110			(72)			(68)			304			264	2, 3
Total			11,788			14,716			1,667			1,445			(303)			(360)			13,152			15,801
Costs and Expenses
Cost of sales			7,855			9,630									(7)			(6)			7,848			9,624	4
Research and development expenses			567			528															567			528
Selling, administrative and general expenses			962			913			318			199			(2)			(2)			1,278			1,110	4
Interest expense			91			94			812			622			(63)			(93)			840			623	1
Interest compensation to Financial Services			168			199									(168)			(199)							1
Other operating expenses			(16)			34			343			336			(63)			(60)			264			310	3, 5
Total			9,627			11,398			1,473			1,157			(303)			(360)			10,797			12,195
Income before Income Taxes			2,161			3,318			194			288									2,355			3,606
Provision for income taxes			583			564			42			72									625			636
Income after Income Taxes			1,578			2,754			152			216									1,730			2,970
Equity in income of unconsolidated affiliates						2			1												1			2
Net Income			1,578			2,756			153			216									1,731			2,972
Less: Net loss attributable to noncontrolling interests			(3)			(6)															(3)			(6)
Net Income Attributable to Deere & Company		$	1,581		$	2,762		$	153		$	216								$	1,734		$	2,978

1	Elimination of intercompany interest income and expense.
2	Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.
3	Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.
4	Elimination of intercompany service fees.
5	Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.

 

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENTS OF INCOME For the Nine Months Ended July 28, 2024 and July 30, 2023 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2024			2023			2024			2023			2024			2023			2024			2023
Net Sales and Revenues
Net sales		$	35,484		$	41,765														$	35,484		$	41,765
Finance and interest income			441			444		$	4,466		$	3,609		$	(700)		$	(727)			4,207			3,326	1
Other income			732			639			341			378			(192)			(269)			881			748	2, 3
Total			36,657			42,848			4,807			3,987			(892)			(996)			40,572			45,839
Costs and Expenses
Cost of sales			24,226			28,306									(21)			(18)			24,205			28,288	4
Research and development expenses			1,664			1,571															1,664			1,571
Selling, administrative and general expenses			2,844			2,630			771			769			(7)			(7)			3,608			3,392	4
Interest expense			314			298			2,354			1,604			(190)			(231)			2,478			1,671	1
Interest compensation to Financial Services			510			496									(510)			(496)							1
Other operating expenses			76			172			1,018			1,043			(164)			(244)			930			971	3, 5
Total			29,634			33,473			4,143			3,416			(892)			(996)			32,885			35,893
Income before Income Taxes			7,023			9,375			664			571									7,687			9,946
Provision for income taxes			1,700			2,020			145			144									1,845			2,164
Income after Income Taxes			5,323			7,355			519			427									5,842			7,782
Equity in income of unconsolidated affiliates						3			4			2									4			5
Net Income			5,323			7,358			523			429									5,846			7,787
Less: Net loss attributable to noncontrolling interests			(9)			(10)															(9)			(10)
Net Income Attributable to Deere & Company		$	5,332		$	7,368		$	523		$	429								$	5,855		$	7,797

1	Elimination of intercompany interest income and expense.
2	Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.
3	Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.
4	Elimination of intercompany service fees.
5	Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.

 

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) CONDENSED BALANCE SHEETS (In millions of dollars) Unaudited
		EQUIPMENT									FINANCIAL
		OPERATIONS									SERVICES									ELIMINATIONS									CONSOLIDATED
		Jul 28			Oct 29			Jul 30			Jul 28			Oct 29			Jul 30			Jul 28			Oct 29			Jul 30			Jul 28			Oct 29			Jul 30
		2024			2023			2023			2024			2023			2023			2024			2023			2023			2024			2023			2023
Assets
Cash and cash equivalents		$	5,385		$	5,720		$	4,858		$	1,619		$	1,738		$	1,718											$	7,004		$	7,458		$	6,576
Marketable securities			155			104			3			985			842			838												1,140			946			841
Receivables from Financial Services			3,951			4,516			5,312											$	(3,951)		$	(4,516)		$	(5,312)										6
Trade accounts and notes receivable – net			1,150			1,320			1,589			8,890			8,687			9,991			(2,571)			(2,268)			(2,283)			7,469			7,739			9,297	7
Financing receivables – net			82			64			60			43,814			43,609			41,242												43,896			43,673			41,302
Financing receivables securitized – net			2									8,272			7,335			7,001												8,274			7,335			7,001
Other receivables			1,821			1,813			2,599			494			869			599			(45)			(59)			(80)			2,270			2,623			3,118	7
Equipment on operating leases – net												7,118			6,917			6,709												7,118			6,917			6,709
Inventories			7,696			8,160			9,350																					7,696			8,160			9,350
Property and equipment – net			7,058			6,843			6,385			34			36			33												7,092			6,879			6,418
Goodwill			3,960			3,900			3,994																					3,960			3,900			3,994
Other intangible assets – net			1,030			1,133			1,199																					1,030			1,133			1,199
Retirement benefits			3,047			2,936			3,503			80			72			71			(1)			(1)			(1)			3,126			3,007			3,573	8
Deferred income taxes			2,192			2,133			1,393			35			68			65			(329)			(387)			(98)			1,898			1,814			1,360	9
Other assets			2,236			1,948			2,083			675			559			583			(8)			(4)			(7)			2,903			2,503			2,659
Assets held for sale												2,965																		2,965
Total Assets		$	39,765		$	40,590		$	42,328		$	74,981		$	70,732		$	68,850		$	(6,905)		$	(7,235)		$	(7,781)		$	107,841		$	104,087		$	103,397
Liabilities and Stockholders' Equity
Liabilities
Short-term borrowings		$	983		$	1,230		$	1,773		$	14,311		$	16,709		$	15,370											$	15,294		$	17,939		$	17,143
Short-term securitization borrowings			1									7,868			6,995			6,608												7,869			6,995			6,608
Payables to Equipment Operations												3,951			4,516			5,312		$	(3,951)		$	(4,516)		$	(5,312)										6
Accounts payable and accrued expenses			13,880			14,862			14,403			3,141			3,599			3,307			(2,624)			(2,331)			(2,370)			14,397			16,130			15,340	7
Deferred income taxes			420			452			420			390			455			184			(329)			(387)			(98)			481			520			506	9
Long-term borrowings			6,592			7,210			7,299			36,100			31,267			30,813												42,692			38,477			38,112
Retirement benefits and other liabilities			2,048			2,032			2,423			109			109			114			(1)			(1)			(1)			2,156			2,140			2,536	8
Liabilities held for sale												1,803																		1,803
Total liabilities			23,924			25,786			26,318			67,673			63,650			61,708			(6,905)			(7,235)			(7,781)			84,692			82,201			80,245
Redeemable noncontrolling interest			84			97			101																					84			97			101
Stockholders' Equity
Total Deere & Company stockholders' equity			23,062			21,785			23,048			7,308			7,082			7,142			(7,308)			(7,082)			(7,142)			23,062			21,785			23,048	10
Noncontrolling interests			3			4			3																					3			4			3
Financial Services equity			(7,308)			(7,082)			(7,142)												7,308			7,082			7,142										10
Adjusted total stockholders' equity			15,757			14,707			15,909			7,308			7,082			7,142												23,065			21,789			23,051
Total Liabilities and Stockholders' Equity		$	39,765		$	40,590		$	42,328		$	74,981		$	70,732		$	68,850		$	(6,905)		$	(7,235)		$	(7,781)		$	107,841		$	104,087		$	103,397

6	Elimination of receivables / payables between Equipment Operations and Financial Services.
7	Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.
8	Reclassification of net pension assets / liabilities.
9	Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
10	Elimination of Financial Services' equity.

 

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENTS OF CASH FLOWS For the Nine Months Ended July 28, 2024 and July 30, 2023 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2024			2023			2024			2023			2024			2023			2024			2023
Cash Flows from Operating Activities
Net income		$	5,323		$	7,358		$	523		$	429								$	5,846		$	7,787
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses			10			3			212			(67)									222			(64)
Provision for depreciation and amortization			932			872			773			757		$	(107)		$	(102)			1,598			1,527	11
Impairments and other adjustments									53			173									53			173
Share-based compensation expense															159			112			159			112	12
Distributed earnings of Financial Services			250			31									(250)			(31)							13
Credit for deferred income taxes			(49)			(322)			(76)			(107)									(125)			(429)
Changes in assets and liabilities:
Receivables related to sales			106			(293)									(2,552)			(4,766)			(2,446)			(5,059)	14, 16
Inventories			391			(534)									(157)			(129)			234			(663)	15
Accounts payable and accrued expenses			(924)			730			212			303			(303)			(986)			(1,015)			47	16
Accrued income taxes payable/receivable			13			(619)			18			24									31			(595)
Retirement benefits			(241)			(115)			(5)			(1)									(246)			(116)
Other			(109)			247			44			(15)			(107)			(56)			(172)			176	11, 12, 15
Net cash provided by operating activities			5,702			7,358			1,754			1,496			(3,317)			(5,958)			4,139			2,896
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)									19,826			18,440			(683)			(848)			19,143			17,592	14
Proceeds from maturities and sales of marketable securities			56			68			277			59									333			127
Proceeds from sales of equipment on operating leases									1,451			1,445									1,451			1,445
Cost of receivables acquired (excluding receivables related to sales)									(21,395)			(21,043)			282			329			(21,113)			(20,714)	14
Purchases of marketable securities			(220)			(19)			(352)			(194)									(572)			(213)
Purchases of property and equipment			(1,041)			(885)			(2)			(2)									(1,043)			(887)
Cost of equipment on operating leases acquired									(2,377)			(2,143)			212			175			(2,165)			(1,968)	15
Decrease (increase) in investment in Financial Services			11			(811)									(11)			811							17
Increase in trade and wholesale receivables									(3,255)			(6,270)			3,255			6,270							14
Collateral on derivatives – net									390			240									390			240
Other			(88)			(210)			(8)			24			1			1			(95)			(185)
Net cash used for investing activities			(1,282)			(1,857)			(5,445)			(9,444)			3,056			6,738			(3,671)			(4,563)
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)			81			(152)			(1,073)			5,192									(992)			5,040
Change in intercompany receivables/payables			558			1,476			(558)			(1,476)
Proceeds from borrowings issued (original maturities greater than three months)			115			60			15,397			9,912									15,512			9,972
Payments of borrowings (original maturities greater than three months)			(1,061)			(116)			(9,731)			(5,746)									(10,792)			(5,862)
Repurchases of common stock			(3,227)			(4,663)															(3,227)			(4,663)
Capital Investment from Equipment Operations									(11)			811			11			(811)							17
Dividends paid			(1,202)			(1,065)			(250)			(31)			250			31			(1,202)			(1,065)	13
Other			(37)			4			(51)			(47)									(88)			(43)
Net cash provided by (used for) financing activities			(4,773)			(4,456)			3,723			8,615			261			(780)			(789)			3,379
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			12			108			(18)			17									(6)			125
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			(341)			1,153			14			684									(327)			1,837
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			5,755			3,781			1,865			1,160									7,620			4,941
Cash, Cash Equivalents, and Restricted Cash at End of Period		$	5,414		$	4,934		$	1,879		$	1,844								$	7,293		$	6,778

11	Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
12	Reclassification of share-based compensation expense.
13	Elimination of dividends from Financial Services to the Equipment Operations, which are included in the Equipment Operations operating activities.
14	Primarily reclassification of receivables related to the sale of equipment.
15	Reclassification of direct lease agreements with retail customers.
16	Reclassification of sales incentive accruals on receivables sold to Financial Services.
17	Elimination of change in investment from Equipment Operations to Financial Services.

 

 

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SOURCE John Deere Company

FAQ

What was Deere's net income for Q3 2024?

Deere & Company (DE) reported a net income of $1.734 billion for the third quarter of 2024, or $6.29 per share.

How did Deere's Q3 2024 results compare to Q3 2023?

Deere's Q3 2024 net income of $1.734 billion was down 42% compared to $2.978 billion in Q3 2023. Earnings per share decreased from $10.20 to $6.29.

What is Deere's full-year net income forecast for 2024?

Despite challenging market conditions, Deere & Company (DE) maintains its full-year net income forecast of approximately $7.0 billion for fiscal 2024.

How did Deere's segment sales perform in Q3 2024?

In Q3 2024, Production & Precision Agriculture sales decreased 25%, Small Agriculture & Turf sales decreased 18%, and Construction & Forestry sales decreased 13% compared to the previous year.

What is Deere's sales outlook for fiscal 2024?

Deere (DE) projects sales declines across all segments for fiscal 2024: Production & Precision Ag and Small Ag & Turf are expected to be down 20% to 25%, while Construction & Forestry is projected to be down 10% to 15%.