Summary
Deere & Company's fiscal year 2025 filing indicates a challenging period characterized by declining net sales and income, primarily driven by unfavorable market conditions impacting the agricultural and construction sectors. Factors such as higher interest rates, increased tariffs (contributing approximately $600 million to costs), and elevated used equipment inventory levels led to lower sales volumes and increased reliance on sales incentives. Despite these headwinds, the company continued to invest in its Smart Industrial Operating Model and Leap Ambitions, focusing on technology integration to enhance customer value. The outlook for fiscal year 2026 anticipates subdued large agriculture sales in North America, though a potential improvement is expected in the small agriculture & turf and construction & forestry segments. The company's Financial Services segment saw a significant increase in net income, driven by special items, lower expenses, favorable financing spreads, and a lower provision for credit losses. Deere & Company maintains a strong liquidity position and is strategically managing its capital, as evidenced by reduced share repurchases. However, ongoing geopolitical risks, global trade policy uncertainties, and a pending legal case regarding repair services remain key areas of focus for investors.
Financial Highlights
41 data points| Revenue | $45.68B |
| R&D Expenses | $2.31B |
| SG&A Expenses | $4.66B |
| Operating Expenses | $39.43B |
| Interest Expense | $3.17B |
| Net Income | $5.03B |
| EPS (Basic) | $18.55 |
| EPS (Diluted) | $18.50 |
| Shares Outstanding (Basic) | 270.90M |
| Shares Outstanding (Diluted) | 271.70M |
Key Highlights
- 1Decline in Net Income and Sales in FY2025 due to unfavorable market conditions, tariffs, and higher interest rates.
- 2Anticipated subdued demand for large agriculture equipment in North America for FY2026, with modest improvement expected in Small Agriculture & Turf and Construction & Forestry segments.
- 3Financial Services segment reported a significant increase in Net Income due to special items, favorable financing spreads, and reduced credit loss provisions.
- 4Company incurred approximately $600 million in direct costs due to incremental import tariffs in FY2025.
- 5Company is actively managing its capital resources, evidenced by reduced share repurchases to navigate the economic cycle.
- 6Ongoing legal proceedings regarding repair services for agricultural equipment pose a potential risk.
- 7Despite current challenges, the company continues to invest in its Smart Industrial Operating Model and Leap Ambitions, focusing on technology integration.