Deere & Company (DE) Q1 2025 earnings summary

Executive summary

• Net sales and revenues for Q1 2025 were $8.51B, down 30% year-over-year, with net income at $869M ($3.19 per share), a 50% decrease, reflecting lower demand and market uncertainty.

• Diluted EPS fell to $3.19 from $6.23 year-over-year.

• Results reflect progress in streamlining field inventory and proactive cost management amid weak demand.

• Full-year net income guidance remains $5.0–$5.5B, with cash flow from equipment operations projected at $4.5–$5.5B.

• Special items, including $163M in discrete tax benefits and a $32M gain reversal from the Banco John Deere S.A. transaction, partially offset declines.

Financial highlights

• Equipment operations net sales fell 35% to $6.809B; operating profit dropped 64% to $793M.

• Gross margin for the quarter was $1.77B, down from $3.29B year-over-year.

• Financial Services net income was $230M, aided by a decreased valuation allowance on assets held for sale.

• Cash, cash equivalents, and marketable securities totaled $7.82B at quarter-end.

• $844M was returned to shareholders via dividends and share repurchases in Q1 2025.

Outlook and guidance

• Fiscal 2025 net income guidance maintained at $5.0–$5.5B; effective tax rate projected at 20–22%.

• Production & Precision Ag net sales forecasted down 15–20%, Small Ag & Turf down 10%, Construction & Forestry down 10–15%.

• Financial Services net income expected to be ~$750M.

• Industry outlook: U.S. and Canada large ag equipment down 30%, small ag and turf down 10%, Europe ag down 5–10%, South America ag flat, Asia ag down slightly.