“It's worth noting, however, that we expect price realization to moderate throughout the remainder of the year in line with our annual guide of 1.5 points for both segments.”

In context

“sion that we've yet to address is the updated outlook for the quarter. Markets have clearly shifted this year, but we've maintained strong performance through the first quarter with 18.5% margins for our equipment operations. This clearly points to the structural improvement that we've achieved, bolstered by a 2024 forecast that would represent our second best year ever from an earnings standpoint. With that in mind, Josh Beal, can you walk us through what's transpired over the last 3 months and how that relates to the rest of the year? Josh Beal: Yes. Great points, Josh, and definitely worth unpacking here. Let's start with our production and precision ag and small ag and turf businesses. Beginning with the quarter, we saw strong year-over-year price realization across both segments. It's worth noting, however, that we expect price realization to moderate throughout the remainder of the year in line with our annual guide of 1.5 points for both segments. Relative to production costs, we saw material and freight coming lower for both large and small ag, leading to favorable year-over-year comparisons for the quarter. This is aligned with our expectations to see slightly favorable production cost compares for both segments for the full year. Looking at SA&G, we had unfavorable impacts in the quarter from incentive compensation, timing of spend, which pulled costs forward into the quarter and foreign exchange. Notably, we don't expect the first quarter to be indicative of our SA&G run rate for the rest of the year, as we're pulling levers in line with the rest of our operations. Shifting to our outlook. We are seeing demand shifts in production of precision ag, impacting combines and large tractors, which is felt mostly in the back half o”