Deere & Company’s net income fell 42% in the third quarter to $1.734 billion as the company continues to grapple with a weakened global agriculture economy.
In its earnings report released today, Aug. 15, the Moline-based equipment maker announced third-quarter $1.734 billion net income compared with $2.978 billion for the same period last year. On a per share basis, earnings were $6.29 for the quarter that ended July 28, compared with $10.20 per share for the quarter ended July 30, 2023.
For the first nine months of the year, Deere’s net income was $5.855 billion, or $21.04 per share, compared with $7.797 billion, or $26.35 per share, for the same period in 2023.
Deere also reported net sales and revenues decreased 17% to $13.152 billion for the third quarter 2024, and decreased 11% to $40.572 billion for the first nine months of the fiscal year.
Net sales were $11.387 billion for the quarter and $35.484 billion for the nine months, compared with $14.284 billion and $41.765 billion last year, respectively.
“John Deere’s third-quarter results showcase our disciplined execution in the face of challenging conditions in the global agricultural and construction sectors,” Deere Chairman and CEO John C. May said in the earnings release. “Despite facing significant headwinds, our teams have demonstrated resiliency in adapting to market fluctuations, allowing us to remain focused on advancing our strategy and consistently providing exceptional value to our customers.”
Despite the year over year declines, Deere’s $6.29 per share earnings for the third quarter was 49 cents a share above the Zacks Consensus Estimate of $5.80.
And while total net sales for the quarter were down year over year, those sales also were well above Zacks Consensus Estimate of $10.87 billion.
Deere shares were up 1.3% to $356 in pre-market trading following Thursday’s release.
The third-quarter report comes just weeks after Deere let go an undisclosed number of salaries workers, including 319 workers at its World Headquarters in Moline and East Moline Harvester Works. The cuts followed hundreds of layoffs among the production, or hourly workers earlier this year.
$124M in job-cutting costs
The earnings report also shows Deere booked charges of $124 million in the quarter to cover employee-separation programs. It expects the total pretax cost to be about $150 million, with the remainder expected to be recorded in 2025.
The company has, to date, remained silent on the exact number of salaried worker separations and their locales. But the earnings release said the company-implemented employee separations in several geographic areas, including the United States, Europe, Asia and Latin America.
The QCBJ previously reported that the separations impacted a total of 170 workers in Iowa, according to a Workers Adjustment Retraining Notice (WARN) Act filing with Iowa Workforce Development. A similar filing in Illinois showed a total of 319 workers were let go across the headquarters and the Harvester Works plant combined.
Meanwhile, Deere said in that its forecast for full-year net income remained unchanged at approximately $7 billion. In its outlook, Deere predicted net sales to fall in its three equipment divisions including a decline of 20% to 25% in both its Production & Precision Ag and Small Ag & Turf divisions. Construction & Forestry net sales are forecast to decline 10% to 15% for the fiscal year.
“In response to weak market conditions, we have taken steps to reduce costs and strategically align our production with customers needs,” Mr. May said. “Although these decisions were difficult, they are vital for our continued success and competitiveness.”
He added in the release “Our commitment to our customers is at the heart of everything we do, and we are confident that these proactive measures will allow us to continue investing in innovative, high quality products and solutions that improve our customers’ lives.”
