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John Deere almost sold out after record profit for 2023

28 November 2022 - Niels van der Boom - 3 comments

John Deere, the world's largest farm equipment manufacturer, posts record numbers in its last financial quarter and for the full year. Deere & Co made that Wednesday, November 23 known. At $2,25 billion, fourth-quarter earnings are up 75%. The order books for 2023 are now largely filled, so the record will not stand for long, the directors expect.

For the 2021/22 financial year ending October 31, earnings totaled $7,13 billion. Converted to € 6,83 billion and that is a record. The old record of 2020/21 has therefore stood for exactly one year. The directors of Deere & Co also have that expectation for the new record. For 2022/23, they expect to post a profit of between $8 and $8,5 billion.

By comparison, CNH Industrial (ranked #2 in the world) posted $1 billion in profit in the third quarter to November 5,88. That is a quarter less compared to the same quarter a year earlier. The number three, Agco, made a profit of $3,1 billion in the same period.

Order books filled
Through the third quarter of 2023, Deere's order books are now filled for tractors, combine harvesters and other agricultural machines. The company also expects to sell more earth-moving equipment in the coming year. Especially as more infrastructure projects are set up in the US. A combination of high prices for grains, grain maize and soy ensure that agricultural entrepreneurs worldwide invest more in new machines. The manufacturer expects this to continue in the coming years; as long as the war in Ukraine continues, the raw materials market will remain disrupted.

John Deere also benefits from better parts availability. It was considerably disrupted during the corona pandemic, but is increasingly relaxing. Its transport has also become cheaper. In the third financial quarter, Deere was able to sell $400 million worth of equipment that previously could not be shipped due to a shortage of parts.

Share up 300%
The financial figures were significantly higher than the expectations of investors and analysts. Shares of Deere & Co rose on the New York Stock Exchange by 6,4% after the quarterly results were announced. On Friday, the stock closed at $441,47. That is the highest closing price ever. The old record was $439,90. That rate was reached at the end of April. Those who invested in shares of the green-yellow giant at the beginning of the corona pandemic (end of March 2020) have now seen the value increase by 300%.

The expectations for 2023 are therefore still very good. Due to the rising prices for tractors and machines, turnover and gross profit will increase anyway. In addition, the company benefits from the ever-decreasing prices for steel in particular, but also for parts.

Moderate growth in Europe
In North America, the manufacturer expects between 5% and 10% growth in agricultural machinery. For Europe it is slightly more moderate with a maximum growth of 5%. In total, between 15% and 20% more sales of agricultural machinery and precision agriculture are expected. CEO John May said during the presentation of the figures that North American farmers usually fill the order books for combines in five months. This year, the sales season was completed in just two months.

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Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.
Comments
3 comments
Subscriber
Hank. 28 November 2022
This is in response to it Boerenbusiness article:
[url = https: // www.boerenbusiness.nl/article/10901782/john-deere-after-record-profit-for-2023-almost-out-of-stock]John Deere almost sold out after record profit for 2023[/url]
It seems that Niels van der Boom is just as much John Deere as Geert Hekkert van de Boerderij.!!??
Subscriber
Niels van der Boom 29 November 2022
Hank. wrote:
This is in response to it Boerenbusiness article:
[url = https: // www.boerenbusiness.nl/article/10901782/john-deere-after-record-profit-for-2023-almost-out-of-stock]John Deere almost sold out after record profit for 2023[/url]
It seems that Niels van der Boom is just as much John Deere as Geert Hekkert van de Boerderij.!!??
Dear Henk,

No, I'm not a 'freak'. I don't see the relevance of this question? Please explain further.
Subscriber
frog 29 November 2022
Niels vanderboom wrote:
Hank. wrote:
This is in response to it Boerenbusiness article:
[url = https: // www.boerenbusiness.nl/article/10901782/john-deere-after-record-profit-for-2023-almost-out-of-stock]John Deere almost sold out after record profit for 2023[/url]
It seems that Niels van der Boom is just as much John Deere as Geert Hekkert van de Boerderij.!!??
Dear Henk,

No, I'm not a 'freak'. I don't see the relevance of this question? Please explain further.
Henk must certainly have to wait a long time for his newly ordered beautiful yellow-green combine?
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