Deere & Co. (DE) delivered better-than-expected results for the third quarter, surpassing revenue and earnings forecasts. Despite a 17% year-over-year decrease in net sales and revenue to $13.152 billion, the company outperformed analysts’ expectations of $10.944 billion. Deere’s earnings per share (EPS) came in at $6.29, down from $10.20 in the same period last year, but still exceeding the consensus estimate of $5.85.
The company’s performance was influenced by a series of involuntary employee-separation programs implemented across several regions to streamline operations. These programs resulted in $124 million in pretax expenses, with a projected total of $150 million.
Despite the cost-cutting measures, Deere remained confident in its 2024 net income outlook, reaffirming its target of $7.00 billion. The company also provided insights into its expectations for key business segments:
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Production & Precision Ag:
Net sales are projected to decline by 20% to 25%, with a price realization increase of 2%.*
Small Ag & Turf:
Net sales are anticipated to fall by 20% to 25%, with a price realization increase of 2%.*
Construction & Forestry:
Net sales are expected to decrease by 10% to 15%, with a price realization increase of 0.5%.*
Financial services:
Deere anticipates $720 million in net income.Deere’s strong third-quarter results and reaffirmation of its 2024 outlook were met with positive reactions from analysts. B of A Securities analyst Ross Gilardi maintained a Neutral rating on Deere but raised the price target from $400 to $410. Similarly, Citigroup analyst Kyle Menges maintained a Neutral rating but increased the price target from $370 to $395.
Deere’s stock closed at $373.26 on Thursday, up 6.3% following the earnings announcement. The company’s performance and analysts’ positive sentiment suggest a potential investment opportunity for those considering Deere stock.
