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Its
shares were down 7.1% in premarket trading.
The world's largest farm equipment maker expects 2024 net income
between $7.75 billion and $8.25 billion, compared with analysts'
average expectations, according to LSEG data, of $9.33 billion.
“While our end markets will fluctuate, we remain focused on
disciplined execution," the company's Chief Executive, John May
said in a statement.
Despite the Illinois-based manufacturer beating Wall Street
profit estimates, Deere's stock slump is consistent with peers
such as Caterpillar that have outperformed forecasts.
Demand for its large tractors and combines has allowed the
company to increase prices to help offset higher raw materials,
logistics and freight costs.
However the mounting dealer inventories that the company noted
in previous quarters are becoming a red flag to investors,
analysts say, leading to speculation demand might have peaked
for the manufacturer and other cyclical industrial companies.
Persistent inflation continues to drag on consumer appetite for
big-ticket items. Experts say weaker consumer sentiment is a
sign Americans are being more frugal, including farmers.
Net farm income is forecast to decline 18.2% from a year ago,
according to the Agriculture Department.
Sales for production and precision agriculture products for crop
care such as fertilizers and applicators have consistently
outpaced other equipment divisions, but revenue for the segment
fell 6% from the year prior.
Deere's net income rose to $2.37 billion, or $8.26 per share,
for the quarter through October from $2.25 billion, or $7.44 per
share, a year earlier.
Total net sales and revenue fell about 1% to $15.41 billion for
the fourth quarter ended on Oct. 31.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil
D'Silva, Jan Harvey and Louise Heavens)
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