John Deere’s stock was soaring even before markets opened today, Feb. 17, after the agricultural, construction and forestry equipment giant reported first quarter earnings of $1.959 billion, or $6.55 a share, on $11.4 billion in equipment sales. The Moline-based Fortune 100 company also raised its outlook for fiscal year 2023, predicting instead “another strong year” […]
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John Deere’s stock was soaring even before markets opened today, Feb. 17, after the agricultural, construction and forestry equipment giant reported first quarter earnings of $1.959 billion, or $6.55 a share, on $11.4 billion in equipment sales. The Moline-based Fortune 100 company also raised its outlook for fiscal year 2023, predicting instead “another strong year” for Deere & Co. According to the 2023 Q1 report, the company saw a significant year-over-year increase in first-quarter net income, which stood at $1.959 billion, or $6.55 per share, for the quarter ended Jan. 29. That compared to net income of $903 million, or $2.92 per share, for the quarter ended Jan. 30, 2022.Worldwide net sales and revenues were up 32% to $12.65 billion in Q1 and net sales were $11.402 billion for the quarter, compared with $8.531 billion in 2022.The quarter’s net sales and earnings also were well above the $5.57 a share and $11.3 billion in equipment sales that Wall Street had earlier estimated. And Q1 earnings increased dramatically over the $2.92 a share that Deere reported last year from $8.5 billion in equipment sales.On the heels of today’s report, Deere stock stood at $427.20 at 9 a.m. today. That was up 6% or $24.27 a share.John May“Deere’s first-quarter performance is a reflection of favorable market fundamentals and healthy demand for our equipment as well as solid execution on the part of our employees, dealers, and suppliers to get products to our customers,” CEO John May said in the earnings news release. “We are, at the same time, benefiting from an improved operating environment, which is contributing to higher levels of production.”Some analysts on Wall Street appeared to be expecting those higher than predicted gains. Zack’s Equity Research said, for example, that they had been pushing up their Deere earnings estimates in the days running up to today’s Q1 report.In other good news for Deere and its stockholders, the company is predicting more of the same for the rest of fiscal year 2023. According to Deere’s current projections, net income for the fiscal year is expected to be in the range of $8.75 billion to $92.5 billion. That’s well above Deere’s net income for fiscal year 2022, which stood at $7.131 billion. In that fourth quarter 2022 report, the company had forecast net income for 2023 to be in the $8 billion to $8.5 billion range.“Deere is looking forward to another strong year on the basis of positive fundamentals, low machine inventories, and a continuation of solid execution,” Mr. May said in the release. “We are proud of our recent performance and remain fully committed to helping our customers do their jobs in a more profitable, productive, and sustainable way.”He added, “We have confidence in our ability to execute on our Leap Ambitions and run our businesses with real purpose, real technology, and real impact.”Those Leap Ambitions and its goals are part of the company's strategic plan to increase product autonomy, connectivity and sustainability worldwide.The company’s first quarter 2023 report also highlighted net increases in production and precision agriculture sales, small agriculture and turf sales and construction and forestry sales.Looking ahead, Deere said challenges that could impact earnings in the remainder of fiscal 2023 include:
Political instability, wars and conflicts including the current fight between Russia and Ukraine.
Natural disasters.
Adverse economic conditions including unemployment, inflation, rising interest rates and a potential recession,
Growth of sustainability and non-food uses (for example ethanol and biodiesel fuel).
Gaps in rural broadband coverage needed to support Deere technology.
