Deere's Q3 Highlights: Top-Line Beat, Bottom-Line Miss, Supply-Chain Issues & More

Deere's Q3 Highlights: Top-Line Beat, Bottom-Line Miss, Supply-Chain Issues & More
  • Deere & Company DE reported third-quarter FY22 net sales and revenue growth of 22% year-over-year to $14.1 billion, beating the consensus of $12.78 billion.
  • EPS increased to $6.16, missing the consensus of $6.69.
  • Sales by segments: Production & Precision Agriculture $6.1 billion (+43% Y/Y), Small Agriculture & Turf $3.64 billion (+16% Y/Y), and Construction & Forestry $3.27 billion (+8% Y/Y).
  • The operating profit increased by 18% Y/Y to $2.65 billion, and the margin contracted by 70 bps to 18.8%.
  • Deere's net cash provided by operating activities in the nine months totaled $418 million, compared to $4.31 billion a year ago. It held cash and cash equivalents of $5 billion as of July 31, 2022.
  • John C. May, chairman and CEO, said, "our results reflected higher costs and production inefficiencies driven by the difficult supply-chain situation."
  • FY22 Outlook: Deere expects a net income of $7.0 billion - $7.2 billion. (prior view $7.0 billion - $7.4 billion).
  • For Production & Precision Ag, the company expects sales to grow by 25% - 30%, Small Ag & Turf sales to expand by 10%-15%, and Construction & Forestry segment sales to increase by ~10%.
  • It expects Financial Services results to be slightly lower than FY21 due to a higher provision for credit losses and higher selling, administrative, and general expenses.
  • "Looking ahead, we believe favorable conditions will continue into 2023 based on the strong response we have experienced to early-order programs," added May.
  • Price Action: DE shares are trading lower by 2.94% at $356.56 during the market session on the last check Friday.
  • Photo Via Company

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