- Third-quarter net sales rise 25%, bolstered by higher rates of production, despite continuing supply-chain pressures.
- Full-year earnings outlook revised to range of $7.0 – $7.2 billion.
- Strong order books and positive customer fundamentals to drive demand in 2023.
Deere & Company reported net income of $1.884 billion for the third quarter ended July 31, 2022, or $6.16 per share, compared with net income of $1.667 billion, or $5.32 per share, for the quarter ended August 1, 2021. For the first nine months of the year, net income attributable to Deere & Company was $4.885 billion, or $15.88 per share, compared with $4.680 billion, or $14.86 per share, for the same period last year.
Net sales and revenues increased 22 percent, to $14.102 billion, for the third quarter of 2022 and rose 13 percent, to $37.041 billion, for nine months. Net sales were $13.000 billion for the quarter and $33.565 billion for nine months, compared with $10.413 billion and $29.461 billion last year.
"We're proud of the extraordinary efforts by our employees to increase factory output and get products to customers under challenging circumstances," said John C. May, Chairman and Chief Executive Officer. "At the same time, our results reflected higher costs and production inefficiencies driven by the difficult supply-chain situation."
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2022 is forecast to be in a range of $7.0 billion to $7.2 billion.
"Looking ahead, we believe favorable conditions will continue into 2023 based on the strong response we have experienced to early-order programs," said May. "We are working closely with our factories and suppliers to meet higher levels of customer demand next year. Additionally, we are confident the company's smart industrial strategy and leap ambitions will continue unlocking new value for customers through Deere's advanced technologies and solutions."
Like most manufacturers, Deere has struggled to secure parts and raw materials, stalling production of equipment and leading to a sales goal miss in the second quarter of 2022. Ken Wagner, owner of Deere dealer Heritage Tractor, says he's seen quite a few cancellations of machine orders because Deere couldn't produce them. "Some of the products are not going to be made in the quantities that we want," Wagner says.
Deere company executives told shareholders that supply chain disruptions will last through the year.
Editor’s Take:
Even with the impact of supply-chain disruptions, Deere has managed to work through the issues and keep the company very profitable. But the real headline in this article was provided by the dealer who suggested that sales would have been even greater, except farmers/ranchers had to cancel orders because Deere couldn’t produce them. In other words, the demand far exceeded the supply. Farmers and ranchers are looking for equipment to purchase and can’t always find what they are looking for. We trust this situation will improve as companies like Deere continue to make adjustments, which will enable them to produce more products to put on dealers lots in the coming months. In the meantime, what are farmers/ranchers going to do with all that money? This creates a perfect opportunity to encourage them to take advantage of your service and parts specials that will help keep your service techs fully employed. Or, remind them they should lease or purchase a new or used truck that comes with AgPack®! Please note that we are extending the free introductory period for AgTruckTrader.com to encourage CAD members to give it a try. So, why not give it a test run today?
