Deere & Company revises full-year guidance amid sales dip By Investing.com

Deere & Company (NYSE: NYSE:) reported a decline in both net sales and revenues in its second quarter, with a 21.2% margin in equipment operations. The company has revised its full-year guidance to a net income of approximately $7 billion for fiscal year 2024, reflecting challenges in the ag and turf segments and a softer retail environment.

Despite a strong demand in the first half of the year, Deere & Company anticipates a decrease in demand during the second half and is adjusting production volumes accordingly. The company also highlighted its commitment to inventory and cost management, while focusing on expanding its technology offerings and precision agriculture solutions.

Key Takeaways

• Deere & Company’s second-quarter net sales and revenues dropped by 12% to $15.235 billion.
• Equipment operations margin stood at 21.2%.
• Net income for financial services operations reached $162 million.
• Full-year net income guidance adjusted to about $7 billion for fiscal year 2024.
• The company plans to reduce production volumes in response to declining demand.
• There is a focus on market share growth through technology offerings and precision agriculture.
• Management of inventory levels remains a disciplined priority for the company.
• Deere & Company returned $1.5 billion to shareholders and continues to prioritize cash returns alongside strategic investments.

Company Outlook

• The company expects net sales for the construction and forestry segment to decline by 5% to 10% in 2024.
• A large new product launch is anticipated for 2025.
• Deere & Company is preparing to significantly reduce inventory levels in the second half of the year.

Bearish Highlights

• Large ag equipment industry sales in the U.S. and Canada have declined by 15%.
• Ag equipment retail demand in Brazil continues to decline, leading to production cuts.
• The competitive environment in the construction and forestry sectors has led to discounts.

Bullish Highlights

• Despite softer market conditions, the company reported strong demand for its technology offerings at the recent Agrishow in Brazil.
• The company remains optimistic about agriculture in Brazil, expecting strong cotton and corn crops to support farmer sentiment.
• Demand for construction and forestry equipment remains stable.

Misses

• Net sales for the small ag and turf segment decreased by 23%.
• The production and precision ag business saw a 16% drop in net sales compared to the…