Deere & Co (NYSE:DE) stock fell 0.081% (As on May 17, 11:13:41 AM UTC-4, Source: Google Finance) after the company reported beat Wall Street’s expectations, but the company lowered its full-year profit forecast for a second time as farmers buy fewer tractors and other equipment as they deal with declining prices for their crops. The company has reported net income of $2.370 billion for the second quarter ended April 28, 2024 compared with net income of $2.860 billion for the quarter ended April 30, 2023. Net sales were $13.610 billion for the quarter compared with $16.079 billion last year. Production and precision agriculture sales decreased 16% to $6.58 billion for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes and higher production costs, partially offset by price realization. Small agriculture and turf sales decreased 23% to $3.19 billion for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes, partially offset by price realization. Construction and forestry sales decreased for the quarter due to lower shipment volumes. Operating profit decreased due to lower shipment volumes and higher SA&G and R&D expenses. Financial services net income for the quarter increased due to income earned on higher average portfolio balances, partially offset by a higher provision for credit losses and less-favorable financing spreads. The results of the prior period were also affected by a correction of the accounting treatment for financing incentives offered to John Deere dealers.
DE in the second quarter of FY 24 has reported the adjusted earnings per share of $8.53, beating the analysts’ estimates for the adjusted earnings per share of $7.87. The company had reported the adjusted revenue decline of 12 percent to $15.24 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $13.3 billion.
Deere, which makes agricultural equipment, cut its profit outlook to $7 billion from a previous range of $7.50 billion to $7.75 billion. Prior to that, the company had forecast a 2024 profit between $7.75 billion and $8.25 billion.
The U.S. Department of Agriculture anticipates that 2024 net farm income, which is a broad measure of profits, will total $116.1 billion. That’s down 25.5% from a year earlier. Adjusting for inflation, net farm income is expected to be down 27.1% this year as farmers contend with lower prices for soybeans and corn. The USDA said that lower direct government payments and increased production costs are also weighing on farmers.