We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Deere & Company (DE - Free Report) shares fell 5.1% in the pre-market trading, as the company cut down its 2024 guidance.
DE reported second-quarter fiscal 2024 (ended Apr 28) earnings of $8.53 per share, beating the Zacks Consensus Estimate of $7.86. The bottom line decreased 12% from the prior-year quarter on lower shipment volumes.
Net sales of equipment operations (comprising Agriculture, and Turf, Construction and Forestry) were $13.61 billion, down 15.4% year over year. However, net sales topped the Zacks Consensus Estimate of $13.25 billion. Total net sales (including financial services and others) were $15.24 billion, down 12.4% year over year.
The cost of sales in the reported quarter was down 14.7% year over year to $9.16 billion. Total gross profit decreased 16.8% year over year to $4.45 billion. Selling, administrative and general expenses fell 4.9% to $1.27 billion from the prior-year period.
Total operating profit (including financial services) was down 20.5% year over year to $3.1 billion in the fiscal second quarter.
Segment Performance
The Production & Precision Agriculture segment’s sales fell 16% year over year to $6.53 billion primarily due to lower shipment volumes, partially offset by price realization. The figure beat our model’s estimated revenues of $5.75 billion for the quarter. Operating profit decreased 24% year over year to $1.65 billion. Our estimate for the segment’s operating profit was $1.34 billion.
Small Agriculture & Turf sales fell 23% to $3.19 billion from the year-earlier quarter. Our projection for the segment’s sales was $3.65 billion. Segmental sales were impacted by lower shipment volume, which was partially negated by price realization. Operating profit fell 33% year over year to $571 million. The figure lagged our estimate of operating profit of $609 million for the segment.
Construction & Forestry sales were $3.84 million, down 7% year over year. The figure surpassed our projection of $3.66 billion. Operating profit decreased 20% year over year to $668 million. The downside was driven by lower shipment volumes and higher expenses. Our estimate for the segment’s operating profit was $690 million.
Revenues in Deere’s Financial Services division were $1.4 billion in the reported quarter, up 26% year over year. The figure surpassed our estimate of $1.06 billion. Net income of Deere’s Financial Services division was $162 million in the reported quarter compared with $28 million in the prior-year quarter. The upside was driven by income earned on higher average portfolio balances.
Financial Update
Deere reported cash and cash equivalents of $5.6 billion at the end of second-quarter fiscal 2024 compared with $7.5 billion at the end of fiscal 2023. Cash flow from operating activities was $944 million in the first half of fiscal 2024 versus an outflow of $147 million in the prior-year period. At the end of the quarter, the long-term borrowing was nearly $41 billion compared with $36 billion at the year-ago quarter’s end.
Guidance
Deere expects net income for fiscal 2024 to be $7 billion, down from the prior stated $7.50-$7.75 billion. The updated view suggests a decline from the net income attributable of $10.2 billion reported in fiscal 2023.
Net sales for Production & Precision Agriculture are expected to decrease 20-25% year over year in fiscal 2024 from the prior-stated decline of 20%. Sales of Small Agriculture & Turf are expected to dip 20-25% compared with the prior stated decrease of 10-15%. Sales of Construction & Forestry are projected to be down 5-10%. The Financial Services segment’s net income is expected to be $770 million.
Price Performance
DE shares have gained 14% in the past year compared with the industry’s growth of 8.5%.
Let us take a look at how the other farm equipment stocks performed in the January-March quarter.
AGCO Corp. (AGCO - Free Report) delivered an adjusted EPS of $2.32 in first-quarter 2024 compared with the prior-year quarter’s $3.51. The reported figure topped the Zacks Consensus Estimate of $2.29.
Revenues of AGCO decreased 12.1% year over year to $2.93 billion in the March-end quarter. The top line missed the Zacks Consensus Estimate of $2.99 billion. Excluding the favorable currency-translation impacts of 1%, net sales fell 13.1% year over year.
CNH Industrial N.V. came out with first-quarter 2024 earnings of 33 cents per share, beating the Zacks Consensus Estimate of 26 cents. This compares to earnings of 35 cents a year ago.
CNHI posted revenues of $4.82 billion for the quarter ended March 2024, surpassing the Zacks Consensus Estimate of $4.64 billion. The top line decreased 9.8% year over year.
Alamo Group Inc. (ALG - Free Report) reported first-quarter 2024 adjusted earnings per share of $2.67, which beat the Zacks Consensus Estimate of $2.66. The bottom line of ALG increased 4% year over year.
Revenues in the reported quarter increased 3.4% year over year to $426 million.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Deere (DE) Q2 Earnings & Sales Top Estimates, '24 View Dips
Deere & Company (DE - Free Report) shares fell 5.1% in the pre-market trading, as the company cut down its 2024 guidance.
DE reported second-quarter fiscal 2024 (ended Apr 28) earnings of $8.53 per share, beating the Zacks Consensus Estimate of $7.86. The bottom line decreased 12% from the prior-year quarter on lower shipment volumes.
Net sales of equipment operations (comprising Agriculture, and Turf, Construction and Forestry) were $13.61 billion, down 15.4% year over year. However, net sales topped the Zacks Consensus Estimate of $13.25 billion. Total net sales (including financial services and others) were $15.24 billion, down 12.4% year over year.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company price-consensus-eps-surprise-chart | Deere & Company Quote
Operational Update
The cost of sales in the reported quarter was down 14.7% year over year to $9.16 billion. Total gross profit decreased 16.8% year over year to $4.45 billion. Selling, administrative and general expenses fell 4.9% to $1.27 billion from the prior-year period.
Total operating profit (including financial services) was down 20.5% year over year to $3.1 billion in the fiscal second quarter.
Segment Performance
The Production & Precision Agriculture segment’s sales fell 16% year over year to $6.53 billion primarily due to lower shipment volumes, partially offset by price realization. The figure beat our model’s estimated revenues of $5.75 billion for the quarter. Operating profit decreased 24% year over year to $1.65 billion. Our estimate for the segment’s operating profit was $1.34 billion.
Small Agriculture & Turf sales fell 23% to $3.19 billion from the year-earlier quarter. Our projection for the segment’s sales was $3.65 billion. Segmental sales were impacted by lower shipment volume, which was partially negated by price realization. Operating profit fell 33% year over year to $571 million. The figure lagged our estimate of operating profit of $609 million for the segment.
Construction & Forestry sales were $3.84 million, down 7% year over year. The figure surpassed our projection of $3.66 billion. Operating profit decreased 20% year over year to $668 million. The downside was driven by lower shipment volumes and higher expenses. Our estimate for the segment’s operating profit was $690 million.
Revenues in Deere’s Financial Services division were $1.4 billion in the reported quarter, up 26% year over year. The figure surpassed our estimate of $1.06 billion. Net income of Deere’s Financial Services division was $162 million in the reported quarter compared with $28 million in the prior-year quarter. The upside was driven by income earned on higher average portfolio balances.
Financial Update
Deere reported cash and cash equivalents of $5.6 billion at the end of second-quarter fiscal 2024 compared with $7.5 billion at the end of fiscal 2023. Cash flow from operating activities was $944 million in the first half of fiscal 2024 versus an outflow of $147 million in the prior-year period. At the end of the quarter, the long-term borrowing was nearly $41 billion compared with $36 billion at the year-ago quarter’s end.
Guidance
Deere expects net income for fiscal 2024 to be $7 billion, down from the prior stated $7.50-$7.75 billion. The updated view suggests a decline from the net income attributable of $10.2 billion reported in fiscal 2023.
Net sales for Production & Precision Agriculture are expected to decrease 20-25% year over year in fiscal 2024 from the prior-stated decline of 20%. Sales of Small Agriculture & Turf are expected to dip 20-25% compared with the prior stated decrease of 10-15%. Sales of Construction & Forestry are projected to be down 5-10%. The Financial Services segment’s net income is expected to be $770 million.
Price Performance
DE shares have gained 14% in the past year compared with the industry’s growth of 8.5%.
Image Source: Zacks Investment Research
Zacks Rank
Deere currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Farm Equipment Stocks
Let us take a look at how the other farm equipment stocks performed in the January-March quarter.
AGCO Corp. (AGCO - Free Report) delivered an adjusted EPS of $2.32 in first-quarter 2024 compared with the prior-year quarter’s $3.51. The reported figure topped the Zacks Consensus Estimate of $2.29.
Revenues of AGCO decreased 12.1% year over year to $2.93 billion in the March-end quarter. The top line missed the Zacks Consensus Estimate of $2.99 billion. Excluding the favorable currency-translation impacts of 1%, net sales fell 13.1% year over year.
CNH Industrial N.V. came out with first-quarter 2024 earnings of 33 cents per share, beating the Zacks Consensus Estimate of 26 cents. This compares to earnings of 35 cents a year ago.
CNHI posted revenues of $4.82 billion for the quarter ended March 2024, surpassing the Zacks Consensus Estimate of $4.64 billion. The top line decreased 9.8% year over year.
Alamo Group Inc. (ALG - Free Report) reported first-quarter 2024 adjusted earnings per share of $2.67, which beat the Zacks Consensus Estimate of $2.66. The bottom line of ALG increased 4% year over year.
Revenues in the reported quarter increased 3.4% year over year to $426 million.