John Deere: Q4 Earnings Miss, Revenue Decline Raises Concerns

Key Findings:

* Revenue: $8.51 billion vs. $9.15 billion estimate (18.9% YoY decline)
* EPS: $3.19 vs. $3.25 estimate (1.8% miss)
* Operating Margin: 20.3%, unchanged YoY
* Free Cash Flow: -$1.48 billion vs. -$1.25 billion in Q4 2023
* Market Cap: $129.8 billion

Company Overview:

Deere & Company (NYSE: DE) is a leading global manufacturer and distributor of agricultural, construction, forestry, and turf care equipment. Founded in the 1800s, the company has revolutionized agriculture with advancements such as the self-polishing cast-steel plow.

Sales Growth:

* Annualized revenue growth of 4.4% over the past five years, below industry average.
* Revenue declined by 8.2% annually over the past two years.

Segment Performance:

* All three major segments (Production & Precision Agriculture, Construction & Forestry, Small Agriculture & Turf) experienced revenue declines over the past two years.

Q4 Results:

* Missed revenue estimates by 7%.
* Below-consensus EPS.
* Operating margin remained stable.
* Analysts forecast 5.7% revenue growth over the next 12 months.

Operating Margin:

* Elite profitability with an average operating margin of 20.3% over the past five years.
* Operating margin increased by 3.9 percentage points over the past five years.

Earnings Per Share (EPS):

* Compounded annual EPS growth of 17.1% over the past five years, driven by improved profitability and share buybacks.
* EPS declined in Q4 2024.
* Analysts expect a 10.5% decline in full-year EPS over the next 12 months.

Key Takeaways:

* Disappointing Q4 results, with revenue and EPS below expectations.
* Revenue declines across all major segments.
* Future EPS growth remains uncertain.
* Valuation and business qualities warrant further analysis before investment decisions are made.

For a comprehensive research report and actionable insights, read our full report here (link provided).