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Deere & Co. Q2 Earnings Top Forecasts, But Shares Dip on Lowered Outlook

Posted May 16, 2024 at 10:15 am
Tim Fries
The Tokenist

Deere & Co. beat earnings expectations in Q1, but shares plunge lower after outlook lowered for 2024.

Deere & Co. (NYSE: DE), a leading agricultural equipment manufacturer, reported strong second-quarter earnings on Thursday, May 16, 2024.

The company’s earnings per share (EPS) and revenue surpassed analyst expectations. However, it lowered its full-year net income forecast due to declining crop prices and reduced demand for its products.

Deere & Co. Tops EPS and Revenue Forecasts in Q1, Lowers 2024 Outlook

Deere & Co. reported Q2 EPS of $8.53, beating the analyst estimate of $7.87 by $0.66. The company’s revenue for the quarter reached $15.24 billion, exceeding the consensus estimate of $13.3 billion.

Despite the strong quarterly performance, Deere revised its full-year net income forecast downward to approximately $7.0 billion, from the previous forecast of $7.5 to $7.75 billion.

The company attributed the revised outlook to declining crop prices and reduced demand for tractors and combine harvesters. The U.S. Department of Agriculture projected a 25.5% decline in net farm income to $116.1 billion for the year, driven by a drop in corn and soybean prices to over three-year lows.

Higher interest rates have also pressured farmers, leading to increased inventories of agricultural equipment and forcing Deere and other manufacturers to cut production. As a result, Deere expects sales of large agricultural equipment to decline between 20% and 25% this year, an adjustment from the earlier expectation of a roughly 20% fall.

Deere & Co. Shares Drop on Lowered 2024 Outlook

Deere & Co. closed at $414.02 on May 15, 2024, reflecting a slight increase of 0.30%. However, in pre-market trading today, the stock was down 6.50%, trading at $387.10 at the time of writing.

The 52-week range for Deere’s stock was $321.85 to $446.76, and the company’s market cap stood at $115.25 billion as of the latest close.

The company’s trailing P/E ratio is 12.07, with a forward P/E ratio of 15.53. Key profitability metrics include a profit margin of 16.39%, return on assets (ROA) of 9.90%, and return on equity (ROE) of 45.61%.

Deere’s total revenue (ttm) was $60.76 billion, with net income attributable to common shareholders at $9.96 billion, and diluted EPS (ttm) at $34.32.

Deere’s total cash (mrq) was $3.83 billion, and the company’s total debt/equity ratio was 289.24%. Analyst price targets for Deere’s stock range from a low of $365.00 to a high of $495.00.

Originally Posted May 16, 2024 – Deere & Co. Q2 Earnings Top Forecasts, But Shares Dip on Lowered Outlook

Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing ofthis article. Please consult our website policy for more information.

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