Deere Reports Q4 2024 Earnings with Mixed Market Outlook

Deere & Company concluded its Q4 2024 earnings call, revealing a drop in revenues and net income, alongside a challenging outlook for 2025. Despite solid margins, the company anticipates continued market contraction affecting equipment demand.

Date: 22-11-2024

AI Rating: 5

The report reveals several critical financial metrics for Deere & Company that may impact the stock's valuation. Key insights include:

Revenue Growth: For fiscal year 2024, Deere's net sales and revenues decreased by 16% to $51.7 billion. Q4 saw an even sharper decline with revenues down 28% to $11.1 billion.
Net Income: The company reported net income of $7.1 billion for the fiscal year and $1.2 billion for Q4, signaling a decrease from the prior period.
Earnings Per Share (EPS): Earnings per diluted share for FY 2024 stood at $25.62, dropping to $4.55 for Q4.
Profit Margins: Despite the decrease in revenues, operating margins were 13.1% for equipment operations in Q4 and 18.2% for the full-year, suggesting effective cost management amidst declining demand.
Free Cash Flow (FCF): Deere achieved over $6.9 billion in operating cash flow from equipment operations, indicating financial resilience even with lowered shipment volumes.

The report indicates that the projected decline in agricultural equipment demand, due to weak market fundamentals, high-interest rates, and stagnant home sales, could detrimentally affect Deere's stock performance in 2025. Conversely, the company’s focus on maintaining positive operating margins and strong technological advancements might appeal to investors looking for long-term value.

Stocks: DE