Deere Reports First Quarter Net Income of $1.751 Billion

Rhea-AI Summary

Deere & Company reported strong quarterly operating margins from equipment operations, with net income forecasted to be $7.50 to $7.75 billion for fiscal 2024. The company highlighted the effectiveness of its Smart Industrial operating model and ongoing investments in solutions for customers.

Positive

• Strong quarterly operating margins from equipment operations
• Net income forecasted to be $7.50 to $7.75 billion for fiscal 2024
• Worldwide net sales and revenues decreased by 4%
• First-quarter net income of $1.751 billion, or $6.23 per share, compared to $1.959 billion, or $6.55 per share, in the previous year
• Company remains committed to empowering customers through investments in solutions
• Financial services net income increased by 12% in the first quarter

Negative

• Net income decreased by 11% in the first quarter
• Net sales and revenues decreased by 4%
• Production and precision agriculture sales decreased by 7% in the first quarter
• Small agriculture and turf sales decreased by 19% in the first quarter
• Construction and forestry operating profit decreased by 9% in the first quarter

Financial Analyst

Deere & Company's latest earnings report indicates a mixed financial performance, with a noteworthy decline in net income by 11% compared to the same quarter last year. This is a significant metric for investors as net income directly affects the company's profitability and, consequently, the shareholder value. The decrease in worldwide net sales and revenues by 4% suggests a contraction in the company's business activities, which could be due to various factors such as market saturation, increased competition, or reduced demand for their products.

However, the company's forecast for full-year net income remains robust, with expectations between $7.50 to $7.75 billion. This projection may offer some reassurance to stakeholders about the company's future performance, despite the current downturn. The operating margins from equipment operations have shown structural improvements, which could signify effective cost management and operational efficiency that might mitigate the impact of lower sales volumes on profitability.

From an investment perspective, the moderation in fleet replenishment and normalization of agricultural fundamentals could indicate a cyclical downturn, which is essential for market participants to monitor. The focus on products that enhance productivity and sustainability aligns with global trends towards efficiency and environmental responsibility, potentially opening new market opportunities for Deere & Company.

Market Research Analyst

The report highlights a sector-wide downturn in the agriculture and turf segments, with Deere & Company expecting sales to decline in various regions including the U.S., Canada, Europe and South America. This regional analysis is crucial for understanding the global reach of the company's market challenges and could inform strategic decisions for investors and the company alike. The decrease in operating profit and margins in both the production & precision agriculture and small agriculture & turf segments reflect these challenges and may have implications for the company's market share and competitive positioning.

Additionally, the flat to slightly negative outlook for construction equipment and the decline in the global forestry segment suggest that the company faces headwinds beyond the agricultural sector. Investors may view these segments' performance as indicators of the broader economic health and construction activity levels. On a positive note, the financial services segment shows resilience with a 12% increase in net income, which could be a buffer against the downturn in other segments.

Economist

The earnings report from Deere & Company provides insights into the broader economic environment, particularly in the agriculture and construction sectors. The normalization of agricultural fundamentals after record levels in previous years suggests a reversion to mean that could be driven by macroeconomic factors such as commodity prices, trade policies and currency exchange rates. The mention of currency translation effects in the segment outlook indicates the company's vulnerability to fluctuations in foreign exchange rates, which can have material impacts on international revenue and profit margins.

The forecasted declines in equipment sales across multiple regions reflect broader economic trends, such as decreased capital expenditure in the face of economic uncertainty or potential shifts in consumer behavior. The company's emphasis on productivity and sustainability may be a strategic response to these economic pressures, aiming to align product offerings with evolving market demands and regulatory landscapes. The financial services segment's performance, with its higher net income forecast, suggests a stable source of revenue that could help cushion the impact of the cyclical nature of equipment sales.

• Strong quarterly operating margins from equipment operations demonstrate structural improvement near mid-cycle volumes.
• Fleet replenishment moderating as agricultural fundamentals normalize.
• Full-year net income now forecasted to be $7.50 to $7.75 billion.

MOLINE, Ill., Feb. 15, 2024 /PRNewswire/ -- Deere & Company reported net income of $1.751 billion for the first quarter ended January 28, 2024, or $6.23 per share, compared with net income of $1.959 billion, or $6.55 per share, for the quarter ended January 29, 2023. 

Worldwide net sales and revenues decreased 4 percent, to $12.185 billion, in the most recent quarter. Net sales were $10.486 billion for the quarter, compared with $11.402 billion in 2023.

"Deere's first-quarter performance underscores the effectiveness of our Smart Industrial operating model and the dedication of our workforce, enabling improved performance across economic cycles that surpasses historical benchmarks," said John C. May, chairman and chief executive officer. "Moreover, we remain committed to empowering our customers to improve their productivity and sustainability through ongoing investment in the next generation of solutions, as evidenced by our partnership on satellite communications to expand rural connectivity announced this quarter."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be in a range of $7.50 billion to $7.75 billion.

"Moving forward, we expect fleet replenishment to moderate as agricultural fundamentals normalize from record levels in 2022 and 2023," May said. "Regardless of where we are in the cycle, demand is accelerating for products and solutions that empower our customers to do more with less, and we are uniquely positioned to deliver unparalleled value to our customers."

Deere & Company		First Quarter
$ in millions, except per share amounts		2024			2023			% Change
Net sales and revenues		$	12,185		$	12,652		-4 %
Net income		$	1,751		$	1,959		-11 %
Fully diluted EPS		$	6.23		$	6.55
Production & Precision Agriculture		First Quarter
$ in millions		2024			2023			% Change
Net sales		$	4,849		$	5,198		-7 %
Operating profit		$	1,045		$	1,208		-13 %
Operating margin			21.6 %			23.2 %

 

Production and precision agriculture sales decreased 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 SA&G and R&D expenses, partially offset by price realization. 

 

Small Agriculture & Turf		First Quarter
$ in millions		2024			2023			% Change
Net sales		$	2,425		$	3,001		-19 %
Operating profit		$	326		$	447		-27 %
Operating margin			13.4 %			14.9 %

 

Small agriculture and turf sales decreased 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 SA&G and R&D expenses. These items were partially offset by price realization and lower production costs.

 

Construction & Forestry		First Quarter
$ in millions		2024			2023			% Change
Net sales		$	3,212		$	3,203
Operating profit		$	566		$	625		-9 %
Operating margin			17.6 %			19.5 %

 

Construction and forestry sales were flat for the quarter, with positive price realization offset by lower shipment volumes. Operating profit decreased primarily due to higher production costs, lower shipment volumes, the unfavorable effects of currency translation, and higher SA&G and R&D expenses. These items were partially offset by price realization and a favorable sales mix.

 

Financial Services		First Quarter
$ in millions		2024			2023			% Change
Net income		$	207		$	185		12 %

Financial services net income for the quarter increased due to income earned on higher average portfolio balances, partially offset by less-favorable financing spreads.

Industry Outlook for Fiscal 2024
Agriculture & Turf
U.S. & Canada:
Large Ag						Down 10 to 15%
Small Ag & Turf						Down 5 to 10%
Europe						Down 10 to 15%
South America (Tractors & Combines)						Down ~ 10%
Asia						Down moderately
Construction & Forestry
U.S. & Canada:
Construction Equipment						Flat to Down 5%
Compact Construction Equipment						Flat
Global Forestry						Down ~ 10%
Global Roadbuilding						Flat

 

Deere Segment Outlook for Fiscal 2024				Currency		Price
$ in millions		Net Sales		Translation		Realization
Production & Precision Ag		Down ~ 20%		~ Flat		+1.5 %
Small Ag & Turf		Down 10 to 15%		~ Flat		+1.5 %
Construction & Forestry		Down 5 to 10%		~ Flat		+1.5 %
Financial Services		Net Income		~$ 770

Financial Services. Fiscal-year 2024 net income attributable to Deere & Company for the financial services operations is forecast to be approximately $770 million. Results are expected to be higher than fiscal year 2023 due to income earned on a higher average portfolio, partially offset by less-favorable financing spreads. A correction of the accounting treatment for financing incentives offered to John Deere dealers impacted 2023 financial results. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," and "Deere Segment Outlook," relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

• changes and compliance with U.S., foreign and international laws, regulations, and policies relating to trade, economic sanctions, data privacy, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies;
• political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the war between Israel and Hamas;
• adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;
• worldwide demand for food and different forms of renewable energy;
• the ability to execute business strategies, including the company's Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions;
• the ability to understand and meet customers' changing expectations and demand for John Deere products and solutions;
• accurately forecasting customer demand for products and services and adequately managing inventory;
• the ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers;
• changes to governmental communications channels (radio frequency technology);
• the ability to adapt in highly competitive markets;
• dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions;
• changes in climate patterns, unfavorable weather events, and natural disasters;
• governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
• higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions;
• availability and price of raw materials, components, and whole goods;
• delays or disruptions in the company's supply chain;
• our equipment fails to perform as expected, which could result in warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations;
• the ability to attract, develop, engage, and retain qualified personnel;
• security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products;
• loss of or challenges to intellectual property rights;
• legislation introduced or enacted that could affect the company's business model and intellectual property, such as right to repair or right to modify legislation;
• investigations, claims, lawsuits, or other legal proceedings;
• events that damage the company's reputation or brand;
• world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and
• housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

Further information concerning the company and its businesses, including factors that could materially affect the financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

 

DEERE & COMPANY FIRST QUARTER 2024 PRESS RELEASE (In millions of dollars) Unaudited
		Three Months Ended
		January 28			January 29			%
		2024			2023			Change
Net sales and revenues:
Production & precision ag net sales		$	4,849		$	5,198		-7
Small ag & turf net sales			2,425			3,001		-19
Construction & forestry net sales			3,212			3,203
Financial services revenues			1,376			1,040		+32
Other revenues			323			210		+54
Total net sales and revenues		$	12,185		$	12,652		-4
Operating profit: *
Production & precision ag		$	1,045		$	1,208		-13
Small ag & turf			326			447		-27
Construction & forestry			566			625		-9
Financial services			257			238		+8
Total operating profit			2,194			2,518		-13
Reconciling items **			26			(22)
Income taxes			(469)			(537)		-13
Net income attributable to Deere & Company		$	1,751		$	1,959		-11

*	Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit for financial services includes the effect of interest expense and foreign exchange gains or losses.
**	Reconciling items are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, equity in income of unconsolidated affiliates, and net income attributable to noncontrolling interests.

 

DEERE & COMPANY STATEMENTS OF CONSOLIDATED INCOME For the Three Months Ended January 28, 2024 and January 29, 2023 (In millions of dollars and shares except per share amounts) Unaudited
		2024			2023
Net Sales and Revenues
Net sales		$	10,486		$	11,402
Finance and interest income			1,360			994
Other income			339			256
Total			12,185			12,652
Costs and Expenses
Cost of sales			7,200			7,934
Research and development expenses			533			495
Selling, administrative and general expenses			1,066			952
Interest expense			802			479
Other operating expenses			369			299
Total			9,970			10,159
Income of Consolidated Group before Income Taxes			2,215			2,493
Provision for income taxes			469			537
Income of Consolidated Group			1,746			1,956
Equity in income of unconsolidated affiliates			2			1
Net Income			1,748			1,957
Less: Net loss attributable to noncontrolling interests			(3)			(2)
Net Income Attributable to Deere & Company		$	1,751		$	1,959
Per Share Data
Basic		$	6.25		$	6.58
Diluted			6.23			6.55
Dividends declared			1.47			1.20
Dividends paid			1.35			1.13
Average Shares Outstanding
Basic			279.9			297.6
Diluted			281.1			299.1

	See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In millions of dollars) Unaudited
		January 28			October 29			January 29
		2024			2023			2023
Assets
Cash and cash equivalents		$	5,137		$	7,458		$	3,976
Marketable securities			1,136			946			852
Trade accounts and notes receivable – net			7,795			7,739			7,609
Financing receivables – net			43,708			43,673			36,882
Financing receivables securitized – net			6,400			7,335			5,089
Other receivables			2,017			2,623			1,992
Equipment on operating leases – net			6,751			6,917			6,502
Inventories			8,937			8,160			10,056
Property and equipment – net			6,914			6,879			6,212
Goodwill			3,966			3,900			3,891
Other intangible assets – net			1,112			1,133			1,255
Retirement benefits			3,087			3,007			3,793
Deferred income taxes			1,833			1,814			914
Other assets			2,578			2,503			2,597
Total Assets		$	101,371		$	104,087		$	91,620
Liabilities and Stockholders' Equity
Liabilities
Short-term borrowings		$	17,117		$	17,939		$	14,129
Short-term securitization borrowings			6,116			6,995			4,864
Accounts payable and accrued expenses			13,361			16,130			13,108
Deferred income taxes			550			520			519
Long-term borrowings			39,933			38,477			35,071
Retirement benefits and other liabilities			2,115			2,140			2,493
Total liabilities			79,192			82,201			70,184
Redeemable noncontrolling interest			100			97			100
Stockholders' Equity
Total Deere & Company stockholders' equity			22,075			21,785			21,332
Noncontrolling interests			4			4			4
Total stockholders' equity			22,079			21,789			21,336
Total Liabilities and Stockholders' Equity		$	101,371		$	104,087		$	91,620

	See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS For the Three Months Ended January 28, 2024 and January 29, 2023 (In millions of dollars) Unaudited
		2024			2023
Cash Flows from Operating Activities
Net income		$	1,748		$	1,957
Adjustments to reconcile net income to net cash used for operating activities:
Provision (credit) for credit losses			31			(130)
Provision for depreciation and amortization			520			494
Share-based compensation expense			46			23
Provision (credit) for deferred income taxes			27			(56)
Changes in assets and liabilities:
Receivables related to sales			(277)			(1,015)
Inventories			(723)			(1,279)
Accounts payable and accrued expenses			(2,327)			(1,577)
Accrued income taxes payable/receivable			183			199
Retirement benefits			(129)			(48)
Other			(7)			186
Net cash used for operating activities			(908)			(1,246)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)			7,752			7,198
Proceeds from sales of equipment on operating leases			506			497
Cost of receivables acquired (excluding receivables related to sales)			(6,447)			(6,322)
Purchases of property and equipment			(362)			(315)
Cost of equipment on operating leases acquired			(454)			(497)
Collateral on derivatives – net			310			345
Other			(88)			(146)
Net cash provided by investing activities			1,217			760
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)			(2,951)			697
Proceeds from borrowings issued (original maturities greater than three months)			5,287			2,505
Payments of borrowings (original maturities greater than three months)			(3,237)			(1,925)
Repurchases of common stock			(1,328)			(1,257)
Dividends paid			(386)			(341)
Other			(30)			(18)
Net cash used for financing activities			(2,645)			(339)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			16			62
Net Decrease in Cash, Cash Equivalents, and Restricted Cash			(2,320)			(763)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			7,620			4,941
Cash, Cash Equivalents, and Restricted Cash at End of Period		$	5,300		$	4,178

	See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY
Condensed Notes to Interim Consolidated Financial Statements
(In millions of dollars) Unaudited
(1)	The consolidated financial statements represent the consolidation of all Deere & Company's subsidiaries. The supplemental consolidating data is presented for informational purposes. Transactions between the equipment operations and financial services have been eliminated to arrive at the consolidated financial statements. In the supplemental consolidating data in Note 2 to the financial statements, the "Equipment Operations" represents the enterprise without "Financial Services", which include the company's production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within "Financial Services."

 

DEERE & COMPANY (2) SUPPLEMENTAL CONSOLIDATING DATA STATEMENTS OF INCOME For the Three Months Ended January 28, 2024 and January 29, 2023 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2024			2023			2024			2023			2024			2023			2024			2023
Net Sales and Revenues
Net sales		$	10,486		$	11,402														$	10,486		$	11,402
Finance and interest income			157			114		$	1,433		$	1,067		$	(230)		$	(187)			1,360			994	1
Other income			289			234			119			177			(69)			(155)			339			256	2, 3
Total			10,932			11,750			1,552			1,244			(299)			(342)			12,185			12,652
Costs and Expenses
Cost of sales			7,207			7,940									(7)			(6)			7,200			7,934	4
Research and development expenses			533			495															533			495
Selling, administrative and general expenses			876			783			192			172			(2)			(3)			1,066			952	4
Interest expense			108			101			762			442			(68)			(64)			802			479	1
Interest compensation to Financial Services			162			123									(162)			(123)							1
Other operating expenses			90			53			339			392			(60)			(146)			369			299	3, 5
Total			8,976			9,495			1,293			1,006			(299)			(342)			9,970			10,159
Income before Income Taxes			1,956			2,255			259			238									2,215			2,493
Provision for income taxes			416			483			53			54									469			537
Income after Income Taxes			1,540			1,772			206			184									1,746			1,956
Equity in income of unconsolidated affiliates			1						1			1									2			1
Net Income			1,541			1,772			207			185									1,748			1,957
Less: Net loss attributable to noncontrolling interests			(3)			(2)															(3)			(2)
Net Income Attributable to Deere & Company		$	1,544		$	1,774		$	207		$	185								$	1,751		$	1,959

1	Elimination of intercompany interest income and expense.
2	Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.
3	Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.
4	Elimination of intercompany service fees.
5	Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.

 

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) CONDENSED BALANCE SHEETS (In millions of dollars) Unaudited
		EQUIPMENT									FINANCIAL
		OPERATIONS									SERVICES									ELIMINATIONS									CONSOLIDATED
		Jan 28			Oct 29			Jan 29			Jan 28			Oct 29			Jan 29			Jan 28			Oct 29			Jan 29			Jan 28			Oct 29			Jan 29
		2024			2023			2023			2024			2023			2023			2024			2023			2023			2024			2023			2023
Assets
Cash and cash equivalents		$	3,467		$	5,720		$	2,665		$	1,670		$	1,738		$	1,311											$	5,137		$	7,458		$	3,976
Marketable securities			147			104			18			989			842			834												1,136			946			852
Receivables from Financial Services			4,296			4,516			5,348											$	(4,296)		$	(4,516)		$	(5,348)										6
Trade accounts and notes receivable – net			1,093			1,320			1,342			9,167			8,687			7,827			(2,465)			(2,268)			(1,560)			7,795			7,739			7,609	7
Financing receivables – net			72			64			51			43,636			43,609			36,831												43,708			43,673			36,882
Financing receivables securitized – net												6,400			7,335			5,089												6,400			7,335			5,089
Other receivables			1,515			1,813			1,583			559			869			489			(57)			(59)			(80)			2,017			2,623			1,992	7
Equipment on operating leases – net												6,751			6,917			6,502												6,751			6,917			6,502
Inventories			8,937			8,160			10,056																					8,937			8,160			10,056
Property and equipment – net			6,879			6,843			6,178			35			36			34												6,914			6,879			6,212
Goodwill			3,966			3,900			3,891																					3,966			3,900			3,891
Other intangible assets – net			1,112			1,133			1,255																					1,112			1,133			1,255
Retirement benefits			3,013			2,936			3,728			75			72			67			(1)			(1)			(2)			3,087			3,007			3,793	8
Deferred income taxes			2,133			2,133			1,015			72			68			53			(372)			(387)			(154)			1,833			1,814			914	9
Other assets			2,058			1,948			1,936			546			559			684			(26)			(4)			(23)			2,578			2,503			2,597
Total Assets		$	38,688		$	40,590		$	39,066		$	69,900		$	70,732		$	59,721		$	(7,217)		$	(7,235)		$	(7,167)		$	101,371		$	104,087		$	91,620
Liabilities and Stockholders' Equity
Liabilities
Short-term borrowings		$	1,203		$	1,230		$	969		$	15,914		$	16,709		$	13,160											$	17,117		$	17,939		$	14,129
Short-term securitization borrowings												6,116			6,995			4,864												6,116			6,995			4,864
Payables to Equipment Operations												4,296			4,516			5,348		$	(4,296)		$	(4,516)		$	(5,348)										6
Accounts payable and accrued expenses			12,677			14,862			11,819			3,232			3,599			2,952			(2,548)			(2,331)			(1,663)			13,361			16,130			13,108	7
Deferred income taxes			478			452			404			444			455			269			(372)			(387)			(154)			550			520			519	9
Long-term borrowings			7,270			7,210			8,155			32,663			31,267			26,916												39,933			38,477			35,071
Retirement benefits and other liabilities			2,006			2,032			2,384			110			109			111			(1)			(1)			(2)			2,115			2,140			2,493	8
Total liabilities			23,634			25,786			23,731			62,775			63,650			53,620			(7,217)			(7,235)			(7,167)			79,192			82,201			70,184
Redeemable noncontrolling interest			100			97			100																					100			97			100
Stockholders' Equity
Total Deere & Company stockholders' equity			22,075			21,785			21,332			7,125			7,082			6,101			(7,125)			(7,082)			(6,101)			22,075			21,785			21,332	10
Noncontrolling interests			4			4			4																					4			4			4
Financial Services' equity			(7,125)			(7,082)			(6,101)												7,125			7,082			6,101										10
Adjusted total stockholders' equity			14,954			14,707			15,235			7,125			7,082			6,101												22,079			21,789			21,336
Total Liabilities and Stockholders' Equity		$	38,688		$	40,590		$	39,066		$	69,900		$	70,732		$	59,721		$	(7,217)		$	(7,235)		$	(7,167)		$	101,371		$	104,087		$	91,620

6	Elimination of receivables / payables between Equipment Operations and Financial Services.
7	Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.
8	Reclassification of net pension assets / liabilities.
9	Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
10	Elimination of Financial Services' equity.

 

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENTS OF CASH FLOWS For the Three Months Ended January 28, 2024 and January 29, 2023 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2024			2023			2024			2023			2024			2023			2024			2023
Cash Flows from Operating Activities
Net income		$	1,541		$	1,772		$	207		$	185								$	1,748		$	1,957
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses			(2)			1			33			(131)									31			(130)
Provision for depreciation and amortization			302			279			254			252		$	(36)		$	(37)			520			494	11
Share-based compensation expense															46			23			46			23	12
Distributed earnings of Financial Services			233			3									(233)			(3)							13
Provision (credit) for deferred income taxes			48			(39)			(21)			(17)									27			(56)
Changes in assets and liabilities:
Receivables related to sales			209			(23)									(486)			(992)			(277)			(1,015)	14, 16
Inventories			(687)			(1,254)									(36)			(25)			(723)			(1,279)	15
Accounts payable and accrued expenses			(2,155)			(1,458)			25			145			(197)			(264)			(2,327)			(1,577)	16
Accrued income taxes payable/receivable			165			192			18			7									183			199
Retirement benefits			(127)			(49)			(2)			1									(129)			(48)
Other			(46)			17			61			163			(22)			6			(7)			186	11, 12, 15
Net cash provided by (used for) operating activities			(519)			(559)			575			605			(964)			(1,292)			(908)			(1,246)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)									8,007			7,495			(255)			(297)			7,752			7,198	14
Proceeds from sales of equipment on operating leases									506			497									506			497
Cost of receivables acquired (excluding receivables related to sales)									(6,513)			(6,375)			66			53			(6,447)			(6,322)	14
Purchases of property and equipment			(362)			(315)															(362)			(315)
Cost of equipment on operating leases acquired									(503)			(531)			49			34			(454)			(497)	15
Decrease in investment in Financial Services			10												(10)										17
Increase in trade and wholesale receivables									(871)			(1,499)			871			1,499							14
Collateral on derivatives – net									310			345									310			345
Other			10			(9)			(98)			(137)									(88)			(146)
Net cash provided by (used for) investing activities			(342)			(324)			838			(205)			721			1,289			1,217			760
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)			78			(136)			(3,029)			833									(2,951)			697
Change in intercompany receivables/payables			288			1,469			(288)			(1,469)
Proceeds from borrowings issued (original maturities greater than three months)			11			1			5,276			2,504									5,287			2,505
Payments of borrowings (original maturities greater than three months)			(40)						(3,197)			(1,925)									(3,237)			(1,925)
Repurchases of common stock			(1,328)			(1,257)															(1,328)			(1,257)
Capital investment from Equipment Operations									(10)						10										17
Dividends paid			(386)			(341)			(233)			(3)			233			3			(386)			(341)	13
Other			(22)			(6)			(8)			(12)									(30)			(18)
Net cash used for financing activities			(1,399)			(270)			(1,489)			(72)			243			3			(2,645)			(339)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			11			48			5			14									16			62
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			(2,249)			(1,105)			(71)			342									(2,320)			(763)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			5,755			3,781			1,865			1,160									7,620			4,941
Cash, Cash Equivalents, and Restricted Cash at End of Period		$	3,506		$	2,676		$	1,794		$	1,502								$	5,300		$	4,178

11	Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
12	Reclassification of share-based compensation expense.
13	Elimination of dividends from Financial Services to the Equipment Operations, which are included in the Equipment Operations operating activities.
14	Primarily reclassification of receivables related to the sale of equipment.
15	Reclassification of direct lease agreements with retail customers.
16	Reclassification of sales incentive accruals on receivables sold to Financial Services.
17	Elimination of change in investment from Equipment Operations to Financial Services.

 

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SOURCE John Deere Company

FAQ

What is Deere & Company's forecasted net income for fiscal 2024?

Deere & Company's net income for fiscal 2024 is forecasted to be in a range of $7.50 billion to $7.75 billion.

How did Deere & Company's first-quarter net income compare to the previous year?

Deere & Company's first-quarter net income was $1.751 billion, or $6.23 per share, compared to $1.959 billion, or $6.55 per share, for the quarter ended January 29, 2023.

What was the percentage change in worldwide net sales and revenues for Deere & Company in the most recent quarter?

Worldwide net sales and revenues decreased by 4% for Deere & Company in the most recent quarter.

Why did production and precision agriculture sales decrease in the first quarter for Deere & Company?

Production and precision agriculture sales decreased due to lower shipment volumes, partially offset by price realization.

How did small agriculture and turf sales perform in the first quarter for Deere & Company?

Small agriculture and turf sales decreased by 19% in the first quarter as a result of lower shipment volumes, partially offset by price realization.

What was the operating profit margin for construction and forestry for Deere & Company in the first quarter?

The operating margin for construction and forestry was 17.6% in the first quarter, down from 19.5% in the previous year.

What was the percentage change in financial services net income for Deere & Company in the first quarter?

Financial services net income for Deere & Company increased by 12% in the first quarter.

What is the industry outlook for agriculture and turf for Deere & Company in fiscal 2024?

The industry outlook for large ag in the U.S. and Canada is down 10 to 15%, small ag and turf in the U.S. and Canada is down 5 to 10%, Europe is down 10 to 15%, South America (tractors & combines) is down approximately 10%, and Asia is down moderately.

What is the segment outlook for Deere & Company in fiscal 2024?

The segment outlook for Deere & Company in fiscal 2024 includes a decrease of approximately 20% in production and precision ag, a decrease of 10 to 15% in small ag and turf, and a decrease of 5 to 10% in construction and forestry.

What is the forecasted net income for Deere & Company's financial services operations in fiscal 2024?

Deere & Company's financial services net income for fiscal 2024 is forecasted to be approximately $770 million.