Deere Reports Strong Income for 2023

Deere & Company is reporting net income of $2.369 billion in its fourth quarter (ending Oct. 29, 2023) and $10.166 billion for its full fiscal year.

The 2023 fourth quarter result improved 5% from net income of $2.246 billion reported by Deere in its previous fourth quarter result, ending Oct. 30, 2022. For fiscal year 2023, net income attributable to Deere & Company was $10.166 billion, compared with $7.131 billion in fiscal 2022. That's an increase of 43%.

Worldwide net sales and revenues decreased 1%, to $15.412 billion, for the fourth quarter of fiscal 2023 and rose 16%, to $61.251 billion for the full year. Net sales were $13.801 billion for the fourth quarter and $55.565 billion for the year, compared with $14.351 billion and $47.917 billion, respectively in 2022.

By most measures, 2023 was a good year for Deere. However, the new fiscal year does not appear to be as promising as the last -- the portend of that perhaps found in that 1% decline in worldwide net sales and revenues realized in Deere's final quarter of 2023.

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be in the range of $7.75 billion to $8.25 billion. Recall, it was $10.166 billion in the year just ended. Deere attributes that potential decline to 'end market fluctuation,' or, its belief that worldwide and industrywide equipment revenues may weaken in the new fiscal year by up to 15%.

Detailing its own revenue outlook for 2024, Deere is forecasting net sales in its production and precision ag segment down 15% to 20%; down 10% to 15% in small ag and turf, and down about 10% in construction and forestry.

Deere's 2024 outlook may be reflected in the Association of Equipment Manufacturers (AEM) October 2023 Ag Tractor and Combine Report. While sales of four-wheel drive tractors were up compared to October 2022, sales in all other machine categories tracked by AEM were down compared to October a year earlier.

Sales of two-wheel drive tractors were down 2.7% in October, compared to October 2022. It is the second monthly decline in a row for this tractor category. Two-wheel drive tractor sales fell 5.7% in September compared to September 2022.

The greatest area of decline in October was combines, the AEM report revealed. Sales of combines in October, compared to October 2022, were down more than 52%. That's a difference of 866 combines this October compared to October 2022. The combine market has been both sharply up and sharply down this year. Monthly sales had been incredibly strong earlier in 2023. For example, in February combine sales were up 132% over February 2022. For the first 10 months of the year, combine sales remain positive, up 4.5% over the same period in 2022.

Here are the fourth quarter financial results by Deere business segment:

-- Production and Precision Agriculture. Net sales were down 6% in the fourth quarter 2023 compared to fourth quarter 2022. Operating profits are up 6%, compared to the same fourth-quarter time frame.

-- Small Agriculture and Turf. Net sales, fourth quarter 2023 compared to fourth quarter 2022, were down 13%. The operating profit was down 12%.

-- Construction and Forestry. Net sales rose 11% in the fourth quarter just ended, compared to fourth quarter 2022. Operating profit was up 25% in the fourth quarter of 2023 compared to the same period in 2022.

Dan Miller can be reached at dan.miller@dtn.com

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