Deere Reports First Quarter Net Income of $869 Million

Rhea-AI Summary

Deere & Company (NYSE: DE) reported first-quarter fiscal 2025 results with net income of $869 million, or $3.19 per share, down from $1,751 million ($6.23 per share) in the same quarter last year. Worldwide net sales and revenues decreased 30% to $8.508 billion, with net sales at $6.809 billion.

The company maintained its full-year 2025 net income guidance of $5.0-5.5 billion despite challenging market conditions. All major segments showed significant declines: Production & Precision Agriculture sales fell 37%, Small Agriculture & Turf decreased 28%, and Construction & Forestry dropped 38%. Financial Services showed an 11% increase in net income.

The company's outlook for fiscal 2025 indicates downward trends across most markets, with U.S. & Canada Large Ag expected to decline ~30%, and Construction Equipment projected to decrease ~10%.

Positive

• Maintained full-year net income guidance of $5.0-5.5 billion
• Financial Services segment net income increased 11% to $230 million
• Successfully progressing in inventory optimization efforts

Negative

• Q1 net income declined 50% to $869 million
• Worldwide net sales and revenues decreased 30% to $8.508 billion
• Production & Precision Agriculture operating profit fell 68%
• Construction & Forestry operating profit decreased 89%
• Small Agriculture & Turf operating profit dropped 62%

Insights

Financial Analyst

Deere's Q1 FY2025 results reveal a strategic pivot in response to cooling agricultural and construction markets. The 50% decline in net income to $869 million and 30% revenue decrease to $8.508 billion primarily reflect deliberate inventory reduction efforts rather than fundamental business deterioration.

The maintained full-year guidance of $5.0-5.5 billion in net income, despite the weak Q1, signals two critical insights: First, management anticipates stronger performance in subsequent quarters as inventory optimization efforts bear fruit. Second, Deere's pricing power remains robust, evidenced by the positive price realization in key segments despite volume declines.

Segment performance reveals a nuanced market picture: The Production & Precision Agriculture division's 37% revenue decline but maintained 11% operating margin demonstrates Deere's ability to protect profitability through cost management. The Construction & Forestry segment's steeper margin compression to 3.3% reflects greater cyclical exposure and competitive pressures in that market.

The company's outlook for fiscal 2025 projects significant market corrections: U.S. & Canada large agriculture equipment down ~30%, small agriculture down ~10%, and construction equipment down ~10%. These projections, combined with Deere's inventory management strategy, suggest the company is positioning for a 'soft landing' rather than a prolonged downturn.

A bright spot emerges in Financial Services, where net income increased 11% to $230 million, highlighting the resilience of Deere's financing arm during market transitions. This diversification provides valuable earnings stability as equipment sales normalize.

• Full-year net income forecast remains steady despite currency fluctuations.
• Results reflect progress in streamlining field inventory amidst uncertain market conditions.
• Continued value delivery as customers navigate a challenging environment.

MOLINE, Ill., Feb. 13, 2025 /PRNewswire/ -- Deere & Company (NYSE: DE) reported net income of $869 million for the first quarter ended January 26, 2025, or $3.19 per share, compared with net income of $1,751 million, or $6.23 per share, for the quarter ended January 28, 2024.

Worldwide net sales and revenues decreased 30 percent, to $8.508 billion, in the most recent quarter. Net sales were $6.809 billion for the quarter, compared with $10.486 billion in 2024.

"Deere's performance in the first quarter highlights our continued focus on optimizing inventory levels of both new and used equipment amidst the uncertain market conditions our customers are facing," said John C. May, chairman and chief executive officer. "We're seeing compelling evidence that our efforts are positioning the company to successfully navigate the current environment."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2025 is forecasted to remain in a range of $5.0 billion to $5.5 billion.

"The stability of our net income guidance not only reflects our resilience in a challenging market but also enables our sustained strategic investments to provide better outcomes for our customers," May added.

Deere & Company		First Quarter
$ in millions, except per share amounts		2025			2024			% Change
Net sales and revenues		$	8,508		$	12,185		-30 %
Net income		$	869		$	1,751		-50 %
Fully diluted EPS		$	3.19		$	6.23

Results for the current period were affected by special items. See Note 1 of the financial statements for further details.

Production & Precision Agriculture		First Quarter
$ in millions		2025			2024			% Change
Net sales		$	3,067		$	4,849		-37 %
Operating profit		$	338		$	1,045		-68 %
Operating margin			11.0 %			21.6 %

Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower SA&G and R&D expenses and lower production costs.

 

Small Agriculture & Turf		First Quarter
$ in millions		2025			2024			% Change
Net sales		$	1,748		$	2,425		-28 %
Operating profit		$	124		$	326		-62 %
Operating margin			7.1 %			13.4 %

Small agriculture and turf sales decreased for the quarter as a result of lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower production costs.

 

Construction & Forestry		First Quarter
$ in millions		2025			2024			% Change
Net sales		$	1,994		$	3,212		-38 %
Operating profit		$	65		$	566		-89 %
Operating margin			3.3 %			17.6 %

Construction and forestry sales decreased for the quarter as a result of lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, unfavorable price realization, and higher SA&G and R&D expenses.

 

Financial Services		First Quarter
$ in millions		2025			2024			% Change
Net income		$	230		$	207		11 %

Financial services net income for the current quarter was affected by a decreased valuation allowance on assets held for sale of Banco John Deere S.A. See Note 1 of the financial statements for further details. Excluding the impact of this special item, net income decreased due to a higher provision for credit losses, partially offset by lower SA&G expenses.

Industry Outlook for Fiscal 2025
Agriculture & Turf
U.S. & Canada:
Large Ag						Down ~ 30%
Small Ag & Turf						Down ~ 10%
Europe						Down ~ 5%
South America (Tractors & Combines)						Flat
Asia						Down slightly
Construction & Forestry
U.S. & Canada:
Construction Equipment						Down ~ 10%
Compact Construction Equipment						Down ~ 5%
Global Forestry						Flat to down 5%
Global Roadbuilding						Flat

Deere Segment Outlook for Fiscal 2025
This outlook does not reflect the impacts of potential import tariffs by the U.S. and retaliatory actions taken by other countries given the uncertain and rapidly evolving environment.

				Currency		Price
$ in millions		Net Sales		Translation		Realization
Production & Precision Ag		Down 15 to 20%		-2.5 %		+1.0 %
Small Ag & Turf		Down ~ 10%		-1.5 %		+0.5 %
Construction & Forestry		Down 10 to 15%		-1.5 %		Flat
Financial Services		Net Income		~ $750

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," "Deere Segment Outlook," and "Condensed Notes to Interim Consolidated Financial Statements" relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

• the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, harvest yields, available farm acres, acreage planted, soil conditions, prices for commodities and livestock, input costs, availability of transport for crops as well as adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;
• government policies and actions in respect to global trade, tariffs, and trade agreements, and the uncertainty of the company's ability to sell products domestically or internationally, continue production at certain international facilities, procure raw materials and components, accurately forecast demand and inventory, manage increased costs of production, absorb or pass on increased pricing, predict financial results, and remain competitive based on these actions and policies;
• higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for the company's products and solutions;
• the company's ability to adapt in highly competitive markets, including understanding and meeting customers' changing expectations for products and solutions, including delivery and utilization of precision technology;
• housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment;
• political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the conflicts in the Middle East;
• worldwide demand for food and different forms of renewable energy impacting the price of farm commodities and consequently the demand for the company's equipment;
• investigations, claims, lawsuits, or other legal proceedings, including the recent lawsuit filed by the Federal Trade Commission (FTC) and the Attorneys General of the States of Arizona, Illinois, Michigan, Minnesota, and Wisconsin alleging that the company unlawfully withheld self-repair capabilities from farmers and independent repair providers;
• changes in climate patterns, unfavorable weather events, and natural disasters, including potential consequences from the recent California wildfires;
• availability and price of raw materials, components, and whole goods;
• delays or disruptions in the company's supply chain;
• suppliers' and manufacturers' business practices and compliance with applicable laws such as human rights, safety, environmental, and fair wages;
• loss of or challenges to intellectual property rights;
• rationalization, restructuring, relocation, expansion and/or reconfiguration of manufacturing and warehouse facilities;
• the ability to execute business strategies, including the company's Smart Industrial Operating Model and Leap Ambitions;
• accurately forecasting customer demand for products and services and adequately managing inventory;
• dealer practices and their ability to manage inventory and distribution of the company's products and to provide support and service for precision technology solutions;
• the ability to realize anticipated benefits of acquisitions and joint ventures, including challenges with successfully integrating operations and internal control processes;
• negative claims or publicity that damage the company's reputation or brand;
• the ability to attract, develop, engage, and retain qualified employees;
• the impact of workforce reductions on company culture, employee retention and morale, and institutional knowledge;
• labor relations and contracts, including work stoppages and other disruptions;
• security breaches, cybersecurity attacks, technology failures, and other disruptions to the company's information technology infrastructure and products;
• leveraging artificial intelligence and machine learning within the company's business processes;
• changes to governmental communications channels (radio frequency technology);
• changes to existing laws and regulations, including the implementation of new, more stringent laws, as well as compliance with a variety of U.S., foreign and international laws, regulations, and policies relating to, but not limited to the following: advertising, anti-bribery and anti-corruption, anti-money laundering, antitrust, consumer finance, cybersecurity, data privacy, encryption, environmental (including climate change and engine emissions), farming, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, human rights, import / export and trade, labor and employment, product liability, telematics, and telecommunications;
• governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy; and
• warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations as a result of the deficient operation of the company's products.

Further information concerning the company or its businesses, including factors that could materially affect the company's financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

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SOURCE John Deere Company

FAQ

What was Deere's (DE) Q1 2025 earnings per share?

Deere reported earnings of $3.19 per share for Q1 2025, compared to $6.23 per share in Q1 2024.

How much did Deere's (DE) revenue decline in Q1 2025?

Deere's worldwide net sales and revenues decreased 30% to $8.508 billion in Q1 2025.

What is Deere's (DE) net income guidance for fiscal 2025?

Deere maintained its fiscal 2025 net income guidance in the range of $5.0 billion to $5.5 billion.

How did Deere's (DE) major segments perform in Q1 2025?

Production & Precision Agriculture sales fell 37%, Small Agriculture & Turf decreased 28%, and Construction & Forestry dropped 38%, while Financial Services net income increased 11%.

What is Deere's (DE) market outlook for Large Ag equipment in U.S. & Canada for 2025?

Deere expects Large Ag equipment market in U.S. & Canada to decline approximately 30% in fiscal 2025.