Deere slumps as softer profit outlook clouds solid Q4 report

Updated at 8:47 AM EST

Deere  (DE) - Get Free Report on Wednesday posted stronger-than-expected fiscal-fourth-quarter earnings but forecast disappointing fiscal 2024 profit, echoing Caterpillar's  (CAT) - Get Free Report indication late last month that international demand was slowing.

For the three months ended in October, Deere earned $8.26 a share, an 11% increase from the year-earlier period and ahead of the Wall Street consensus forecast of $7.47 a share. Group worldwide sales, Deere said, slipped 1% from a year earlier to $15.41 billion. That tally topped analysts' estimates of $13.58 billion.

Looking into its coming fiscal year, Deere estimated net income of between $7.75 billion and $8.25 billion, shy of the LSEG forecast of around $9.33 billion.

"Deere's fourth-quarter and full-year results can be attributed to the successful execution of our Smart Industrial Operating Model and the value that customers recognize in our industry-leading products and solutions," Chief Executive John May said in a statement. 

"We must also recognize and credit our dedicated employees, dealers, and suppliers, whose hard work and focus have been instrumental to our overall success."

Deere shares were marked 5.8% lower trading following the earnings release to indicate a Wednesday opening bell price of $360.55, a move that would erase all the stock's gains for the past six months. 

CAT: 'Continued weakness in China'

Late last month, larger rival Caterpillar noted ongoing weakness in China, as well as a shrinking order book. The factors offset solid September-quarter earnings. 

"As we have mentioned during previous earnings calls, we anticipate continued weakness in China, and expect it to remain well below our typical range of 5% to 10% of enterprise sales," CEO Jim Umpleby told investors on Oct. 31. 

"In [Europe-Africa-Mideast] we anticipate the region will be slightly down as weakness continues in Europe, partially offset by continuing strong construction demand in the Middle East. Construction activity in Latin America is expected to be about flat versus strong 2022 performance."

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