Deere Q1 Earnings: Sales Drop, Margins Shrink, Inventory Streamlining And More

Deere & Co DE reported a first-quarter 2025 net sales and revenue decline of 30% year-over-year to $8.51 billion, beating the consensus of $7.70 billion.

Net sales were $6.809 billion for the quarter, compared with $10.486 billion in 2024. Deere clocked an EPS of $3.19, down from $6.23 in the prior year, beating the consensus of $3.14.

Production & Precision Agriculture net sales declined 37% YoY to $3.067 billion, Small Agriculture & Turf net sales fell 28% to $1.748 billion, and Construction & Forestry revenue declined 38% to $1.994 billion due to lower shipment volumes.

Financial services revenues grew 7% year over year to $1.470 billion. Financial services net income increased to $230 million from $207 million a year ago, aided by a lower valuation allowance on Banco John Deere S.A. assets.

Total operating profit fell 63.4% YoY to $793 million, and margin contracted sharply to 9.3%. Segment operating margins: Production & Precision Agriculture 11%, down YoY from 21.6%; Small Agriculture & Turf 7.1%, down YoY from 13.4%; Construction & Forestry 3.3%, down YoY from 17.6%.

As of January 26, Deere held $7.8 billion in cash and equivalents. DE’s net cash used in operating activities for the quarter totaled $1.132 billion, compared to $908 million a year ago.

“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,” stated John C. May, chairman and chief executive officer.

Guidance 2025: Deere reaffirms fiscal 2025 net income to be between $5.0 billion and $5.5 billion.

Deere expects sales decline across segments: Production & Precision is expected to drop by 15% – 20%, Small Ag & Turf by ~10%, and Construction & Forestry by 10% – 15%. Financial Services net income is expected to be ~$750 million.

Price Action: DE shares traded lower by 4.52% at $455.00 premarket at the last check Thursday.

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