Investing.com — Deere & Company reported fourth-quarter earnings that exceeded analyst expectations, despite facing significant market challenges. The agricultural and construction equipment manufacturer saw its stock rise more than 4% following the announcement.
For the quarter ended October 27, 2024, Deere reported net income of $1.245 billion, or $4.55 per share, surpassing the analyst estimate of $3.89 per share. Revenue for the quarter came in at $11.14 billion, topping the consensus estimate of $9.23 billion. However, both figures represent substantial YoY declines, with net income down 47% and worldwide net sales and revenues decreasing 28% compared to the same quarter last year.
The company's Production & Precision Agriculture segment saw the steepest decline, with net sales dropping 38% YoY to $4.305 billion. The Small Agriculture & Turf and Construction & Forestry segments also experienced significant decreases, with sales down 25% and 29% respectively.
John May, chairman and CEO of Deere & Company (NYSE:DE), commented on the results: "Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment."
Looking ahead, Deere provided guidance for fiscal 2025, projecting net income attributable to the company to be in the range of $5.0 billion to $5.5 billion. This outlook reflects ongoing headwinds across the company's markets but also highlights improved structural performance.
The company expects U.S. and Canada large agriculture equipment sales to be down approximately 30% in fiscal 2025, while small agriculture and turf equipment sales are projected to decline about 10%. Construction equipment sales in the same region are forecasted to decrease by around 10%.
Despite the challenges, May emphasized the company's commitment to future investments, stating, "We remain committed to making meaningful investments in our future while deepening our relationships with customers."
Reacting to the results, analysts at Citi noted Deere's "solid margin performance," although they "believe its FY25 guide is fairly in-line with investor expectations."
Morgan Stanley (NYSE:MS) expected the positive investor reaction to Deere's results, noting its "F4Q24 EPS beat, and FY25 guide that missed consensus but we think came in roughly in-line versus our sense of buyside expectations."
Finally, BMO Capital stated: "Deere beat FQ4 and edged ~$7B F2024 (Oct) NI guidance (generating ~$7.1B). However, the F2025 guidance for NI ~$5.25B (below ~$5.8B consensus) is weaker than
expected despite pricing seen slightly higher in F2025 as equipment sales are still seen contracting ~10-15% along with sharp margin contraction. We think the stock will remain range-bound, as F2025 EPS seems sub-$20 with many investors applying 20x as a trough multiple proxy for DE."
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