Deere & Company (NYSE: DE) released its financial results for the third quarter ending July 27, 2025, showcasing a notable decline in net income compared to the previous year. The company reported a net income of $1.289 billion, or $4.75 per share, down 26% from $1.734 billion, or $6.29 per share, from the same quarter in 2024. For the first nine months of the fiscal year, net income attributable to Deere was $3.962 billion, or $14.57 per share, a stark decrease of 32% from $5.855 billion, or $21.04 per share, last year.

1. Financial Performance Overview

Declining Revenue

Deere's total net sales and revenues for the third quarter fell by 9% to $12.018 billion compared to $13.152 billion in the same quarter of the previous year. For the nine-month period, total sales and revenues decreased by 18%, amounting to $33.290 billion compared to $40.572 billion in 2024. The breakdown of net sales for the quarter included:

Production & Precision Agriculture: $4.273 billion (down 16% from $5.099 billion)

Small Agriculture & Turf: $3.025 billion (down 1% from $3.053 billion)

Construction & Forestry: $3.059 billion (down 5% from $3.235 billion)

Operating Profit Declines

Operating profits also suffered across all segments. The company's overall operating profit for the third quarter was $1.568 billion, a decrease of 32% from $2.297 billion in the prior year. Each segment contributed to this decline:

Production & Precision Agriculture: Operating profit fell to $580 million (down 50% from $1.162 billion)

Small Agriculture & Turf: Operating profit decreased to $485 million (down 2% from $496 million)

Construction & Forestry: Operating profit dropped to $237 million (down 47% from $448 million)

Financial Services Strength

In contrast, Deere's financial services segment experienced a positive shift, reporting net income of $205 million for the quarter, up 34% from $153 million in 2024. This increase was attributed to a lower provision for credit losses and a decrease in prior year special items.

2. Management's Perspective

John May, chairman and CEO of Deere, commented on the results: "By proactively managing inventory, we've matched production to retail demand, enabling our company and dealers to respond swiftly to market shifts and customer needs. By continuing to address the high levels of used equipment in the industry, we're building a healthier market for everyone—our customers, our dealers, and our business—even in these challenging times."

Future Outlook

Looking ahead, Deere forecasts its net income for fiscal 2025 to be in the range of $4.75 billion to $5.25 billion. May emphasized the company’s commitment to delivering solutions that meet current customer needs while laying the groundwork for future growth. He highlighted the increasing utilization of advanced technologies, such as See & Spray and Harvest Settings Automation, which are empowering customers to enhance productivity amid industry challenges.

3. Segment Performance Insights

Production & Precision Agriculture

The segment witnessed a significant decline in net sales and operating profit, attributed to lower shipment volumes and unfavorable price realization.

Small Agriculture & Turf

Sales remained relatively stable, with a minor decrease of 1%, supported by favorable currency translation. However, increased tariffs impacted profit margins.

Construction & Forestry

This segment's sales decline was primarily due to unfavorable price realization, which significantly affected operating profits.

4. Industry Outlook

Deere's outlook for the agricultural and construction sectors in fiscal 2025 remains cautious:

Agriculture & Turf:

Large Ag: Down approximately 30%

Small Ag & Turf: Down approximately 10%

Construction & Forestry:

Construction Equipment: Down approximately 10%

Compact Construction Equipment: Flat to down 5%

5. Conclusion

Despite the challenging financial landscape, Deere & Company is actively positioning itself for future growth through strategic inventory management and innovation in technology. The company's resilience is evident in its commitment to enhancing customer productivity and addressing the evolving demands of the agricultural and construction markets. As the industry navigates these turbulent times, Deere's focus on operational efficiency and technological advancements will be crucial in maintaining its competitive edge.

Original press release