Construction activity flat while agriculture slips for Deere & Company to start fiscal 2024
After a 2023 marked by steady growth, lower shipment volumes led to a decline in key financial metrics for Deere & Company in the first quarter of fiscal 2024. Agriculture segments were hardest hit, while construction remained steady.
Deere reported worldwide net sales and revenues of $12.185 billion in the quarter ending January 29, 2024, a four-percent decline from the same period in 2023. Net sales in the quarter were $10.486 billion, down from $11.402 billion.
The company reported net income of $1.75 billion, an 11-percent drop year-over-year.
Deere's agriculture segments were significantly impacted in the first quarter, facing lower shipment volumes across the board. Net sales for Production & Precision Agriculture equipment dropped 7 percent, while Small Agriculture & Turf experienced a 19 percent decline in the quarter.
The Construction & Forestry segment saw sales of $3.212 billion, virtually flat from the previous year. Positive price realization was offset by lower shipment volumes. Operating profit in the segment dropped by 9 percent, driven by higher production costs, lower shipment volumes, and other factors, partially offset by price realization and a favourable sales mix.
Deere projected construction equipment to remain flat or decline slightly through 2024. Global forestry is expected to decline by around 10 percent, while compact equipment and roadbuilding are expected to remain flat.
The company also adjusted its full-year forecast downward, and now expects net income for the fiscal year to be in the range of $7.5 to $7.75 billion.
