Deere reports year-over-year revenue drop

Deere & Company reported, for the fourth quarter of its fiscal 2024, revenue of $9.3 billion, down 32% compared to the same period last year. By segment, construction and forestry segment sales were down 29%, production and precision agriculture sales fell 38%, and small agriculture and turf sales were down 25% year over year. Deere reported that its profit of $1.2 billion in Q4 24 was off 47% from its $2.4 billion profit figure in the Q4 2023.

“Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment,” said John May, chairman and CEO of Deere & Company. “Together with the structural improvements made over the past several years, these adjustments enable us to serve our customers more effectively and achieve strong results across the business cycle.”

Small Agriculture & Turf

• Net sales ($ in millions)
• 2024 = $2,306 
• 2023 = $3,094
• Change -25%

Small agriculture and turf sales decreased for the quarter due to lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes / sales mix and special items described in Note 1, partially offset by price realization and lower warranty expenses.

Deere predicts continued declining sales volume, specifically a 10% to 15% fall in sales across segments. Depending on the scale and scope of the Trump tariffs and deportation efforts, Deere and U.S. farmers could both feel further economic constrictions in 2025. 

Comments from the investor call transcript

John C. May – Chairman and Chief Executive Officer

2024 was characterized by our resiliency in the face of significant challenges. The pullback we experienced in global markets this year provided our organization with an opportunity to showcase the structural improvements we’ve made since announcing the Smart Industrial operating model in 2020.

Starting with our financial scorecard, we continued to demonstrate better performance across the cycle. Notably, our margins in 2024 exceeded 18%, reflecting nearly 700 bips of improvement from 2020, which was the last time we were at this point in the cycle. This margin expansion has enabled us to invest record levels back into the business this year. More important than the numbers, I couldn’t be prouder of the resilience demonstrated by our John Deere employee team this year.

Josh Rohleder – Manager, Investor Communications

Looking ahead to 2025, we expect continued contraction of ag markets globally to result in ag and turf equipment demand at or below trough levels. Additionally, construction and forestry market demand is expected to be down as healthy end markets are offset by continued uncertainty in equipment purchases. 

We expect industry sales of large ag equipment in the U.S. and Canada to decline approximately 30% as demand further moderates amid weak farm fundamentals, high interest rates, elevated used inventory levels, and short-term farm liquidity concerns heading into next year’s growing season. For small ag and turf in the U.S. and Canada, industry demand is estimated to be down around 10%.