Company expects net sales to fall 10%-15% across all its machinery segments in 2025
21 November 2024 - 16:18
byShivansh Tiwary and Utkarsh Shetti
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Deere & Co. 8R autonomous tractor is pictured at Jensen Test Farm in Bondurant, Iowa on April 28 2022. File Picture: REUTERS/Bianca Flowers
Bengaluru — Deere & Co forecast lower-than-expected 2025 profit on Thursday, as sagging farm incomes and inflationary pressures affect demand for the company’s tractors and other agricultural equipment.
A decline in farm incomes, high interest rates and an uncertain economy have compelled farmers to reassess large expenses on agricultural machinery and forced dealers to limit inventory restocking.
US farm income is expected to fall for a second consecutive year in 2024, as farmers grapple with maize and soya bean prices hovering near four-year lows.
The US department of agriculture estimates this year’s net farm income, a broad measure of profitability in the agricultural economy, to hit $140bn, down 4.4%, or $6.5bn, from a year earlier.
“Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment,” CEO John May said.
The world’s largest farm-equipment maker expects profit for financial year 2025 in the range of $5bn-$5.5bn, compared with analysts’ average estimate of $5.93bn, according to data compiled by LSEG.
For 2025, Deere expects net sales to fall 10%-15% across all its machinery segments.
Concerns around supply chains and a surge in demand led dealers to increase their inventories last year, boosting sales for Deere, which primarily sells its agricultural and construction equipment through independent and franchised dealers.
However, amid the recent demand slowdown, sceptical dealers have slowed inventory restocking.
The company reported a net income of $1.25bn, or $4.55 per share, compared with $2.37bn, or $8.26 per share, a year earlier.
Fourth quarter worldwide net sales and revenue fell 28% to $11.14bn.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Deere cuts annual forecasts amid farm equipment sales slump
Company expects net sales to fall 10%-15% across all its machinery segments in 2025
Bengaluru — Deere & Co forecast lower-than-expected 2025 profit on Thursday, as sagging farm incomes and inflationary pressures affect demand for the company’s tractors and other agricultural equipment.
A decline in farm incomes, high interest rates and an uncertain economy have compelled farmers to reassess large expenses on agricultural machinery and forced dealers to limit inventory restocking.
US farm income is expected to fall for a second consecutive year in 2024, as farmers grapple with maize and soya bean prices hovering near four-year lows.
The US department of agriculture estimates this year’s net farm income, a broad measure of profitability in the agricultural economy, to hit $140bn, down 4.4%, or $6.5bn, from a year earlier.
“Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment,” CEO John May said.
The world’s largest farm-equipment maker expects profit for financial year 2025 in the range of $5bn-$5.5bn, compared with analysts’ average estimate of $5.93bn, according to data compiled by LSEG.
For 2025, Deere expects net sales to fall 10%-15% across all its machinery segments.
Concerns around supply chains and a surge in demand led dealers to increase their inventories last year, boosting sales for Deere, which primarily sells its agricultural and construction equipment through independent and franchised dealers.
However, amid the recent demand slowdown, sceptical dealers have slowed inventory restocking.
The company reported a net income of $1.25bn, or $4.55 per share, compared with $2.37bn, or $8.26 per share, a year earlier.
Fourth quarter worldwide net sales and revenue fell 28% to $11.14bn.
Reuters
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