01—Abstract
Summary
Summary of the 8-K filed August 14, 2025. Cited figures are marked; the original filing is the authoritative source.
Deere & Company reported third quarter fiscal 2025 net income attributable to the company of $1.289 billiona, or $4.75 per diluted share, down 26% from $1.734 billion, or $6.29 per share, a year earlier.
Worldwide net sales and revenues fell 9% to $12.018 billionb, and year-to-date net income fell 32% to $3.962 billion. The decline was driven mainly by Production & Precision Agriculture, where operating profit fell 50% on lower shipment volumes and unfavorable price realization, and Construction & Forestry, where operating profit fell 47% on price realization and tariff-driven production costs. Management described customers as cautious amid ongoing uncertainty and said inventory had been matched to retail demand.
Full-year fiscal 2025 net income guidance was narrowed to a range of $4.75 billion to $5.25 billionc. Management's industry outlook calls for U.S. and Canada large ag down roughly 30%, small ag and turf down roughly 10%, and construction equipment down roughly 10%. Segment net sales guidance is down 15% to 20% for Production & Precision Ag, down roughly 10% for Small Ag & Turf, and down 10% to 15% for Construction & Forestry.
Financial Services net income is forecast at about $770 milliond, up from $696 million in fiscal 2024. For investors, the key takeaways are continued earnings pressure from weak large-ag demand, tariff costs, and price realization, partly offset by a stronger Financial Services segment and lower provisions for credit losses.
The filing also flags risk factors including tariffs, the FTC lawsuit over right-to-repair, and cybersecurity. The company's fiscal 2025 operating cash flow guidance is $4.5 billion to $5.5 billion for equipment operations, and it expects a 19-21% effective tax rate.
02—Key points
Key Highlights
- Q3 FY2025 net income of $1.289B ($4.75 per diluted share), down 26% YoY from $1.734B ($6.29), with net sales and revenues down 9% to $12.018B.
- Nine-month net income of $3.962B ($14.57 per share) fell 32% YoY, and nine-month net sales and revenues fell 18% to $33.290B.
- Production & Precision Ag operating margin compressed to 13.6% from 22.8% on a 16% sales decline, with operating profit down 50% to $580M.
- Construction & Forestry operating margin fell to 7.7% from 13.8%, with operating profit down 47% to $237M, driven by unfavorable price realization and tariff-related production costs.
- FY2025 net income guidance narrowed to $4.75B-$5.25B, with large ag in the U.S. and Canada forecast down about 30% and Production & Precision Ag net sales down 15%-20%.
- Financial Services Q3 net income rose 34% to $205M on a lower provision for credit losses, and FY2025 Financial Services net income is forecast at about $770M.
- Special items included a $61M pretax impairment tied to overseas battery operations and a $32M favorable BJD measurement adjustment in the nine-month period.
03—Questions
Frequently Asked Questions
Why did Deere's quarterly earnings decline so sharply?
The decline was driven mainly by lower equipment shipment volumes and unfavorable price realization, especially in Production & Precision Ag (operating profit down 50%) and Construction & Forestry (down 47%). Tariffs also raised production costs, and Small Ag & Turf profit was pressured by higher tariffs, partly offset by lower warranty and material costs.
Did Deere change its full-year outlook?
Yes, it narrowed its fiscal 2025 net income guidance to $4.75B-$5.25B. The company also forecasts segment sales declines of 15%-20% for Production & Precision Ag, about 10% for Small Ag & Turf, and 10%-15% for Construction & Forestry, along with a 19%-21% effective tax rate.
Is Deere's Financial Services segment a bright spot?
Relatively, yes. Financial Services net income rose 34% in the quarter to $205M, helped by a lower provision for credit losses and the absence of prior-year special items. Full-year Financial Services net income is forecast at about $770M, up from $696M in fiscal 2024.
What is the outlook for demand in key markets?
Management expects U.S. and Canada large ag to decline about 30% in fiscal 2025, small ag and turf about 10%, and construction equipment about 10%. Europe is forecast flat to down 5%, South American tractors and combines flat, and Asia flat to up 5%.
What risks should investors watch?
Key risks include tariffs and retaliatory trade actions, weak farm and construction demand, and pricing pressure. The filing also cites the FTC and several state attorneys general lawsuit alleging the company unlawfully withheld self-repair capabilities, along with supply chain, cybersecurity, and credit-loss exposure.
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