Deere Forecasts Downturn in Construction Sales in 2024

John Deere says despite recent gains, its 2024 outlook for its construction and forestry division remains mixed with uncertainty due in part to impending mega projects and infrastructure spending.

The manufacturer reported a strong fourth quarter, with construction and forestry sales increasing 11% to $3.74 billion due to price realization and higher shipment volumes.

Within the division, operating profit improved to $516 million, resulting in a 13.8% operation margin, primarily due to price realization, partially offset by higher production costs and a less favorable sales mix. 

The unfavorable effects of foreign currency exchange and a loss on the sale of the Russian roadbuilding business also impacted the results for the fourth quarter.

John Deere"On one hand, you have strong end-markets and infrastructure, which are offset by some caution in our guide around residential and the office and commercial sector, given elevated interest rates," said Brent Norwood, director of investor relations. “On the other hand, you have these mega projects and systemic investment in U.S. manufacturing, which will be significant albeit hard to predict on timing.”

Net income was up 5% for Deere & Company in the fourth quarter of 2023.

The construction and ag equipment manufacturer reported a net income of $2.369 billion for Q4, which ended October 29, 2023, compared with a net income of $2.246 billion for Q4 2022.