Deere’s Q3 2024 Earnings: It’s A Game Of Expectations

Hi reader,

Deere reported its Q3 earnings last week and again demonstrated why investing is a “game” of expectations. Results were, as expected, bad, but the company outperformed the market’s expectations and, therefore, enjoyed a pretty favorable market reaction. Since reporting earnings, the stock is up around 7%.

Of course, this doesn’t say much about the long-term thesis because the stock has provided pretty much no returns to shareholders over the past three years,

This quarter also portrayed that execution matters dearly. I read CNH Industrial’s earnings call earlier this month to grasp some industry insights and was surprised to learn about the execution differences between both companies. CNH has faced rising expenses caused by quality defects across its equipment, which is weighing in on profitability. Even if we outstrip the impact of these quality defects, CNH Industrial’s margins are and have been significantly lower than those of Deere. Growth has been somewhat similar despite Deere being the leader. I left some interest charts comparing Deere, AGCO, and CNH Industrial in this tweet (obviously acknowledging that they are not perfect comps).

Remember you can read my entire Deep Dive below:

Without further ado, let’s get on with the article.