Deere is still grappling with a weak demand environment, with sales sharply lower across its core operating segments

Deere's stock fell 5% early Thursday, after the maker of agricultural and construction equipment reported fiscal first-quarter earnings that fell sharply from a year ago and issued guidance for further steep sales declines in 2025.

The company has been grappling with a weak demand environment. Last year, it announced plans to cut an undisclosed number of jobs to align production with demand better.

Moline, Ill.-based Deere (DE) had net income of $869 million, or $3.19 a share, for the quarter through Jan. 26 - down from $1.751 billion, or $6.23 a share, a year ago. Sales fell 30% to $8.508 billion. The numbers were ahead of the FactSet consensus for EPS of $3.11 and sales of $7.700 billion.

"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," Chief Executive John C. May said in prepared remarks.

The company expects fiscal 2025 net income in the range of $5.0 billion to $5.5 billion, while FactSet expects $5.3 billion.

Deere expects sales at its production and precision agriculture division, which makes products aimed at improving crop yields and helping farmers improve efficiency, to fall 15% to 20% in fiscal 2025. It expects small agriculture & turf sales to fall 10% and construction and forestry sales to fall 10% to 15%. The guidance does not include any impact from tariffs by the U.S. or retaliatory actions by other countries.

Production and precision agriculture sales fell 37% in the first quarter to $3.067 billion, below the $3.525 billion FactSet consensus. The decline came amid slower shipment volumes, while operating profit fell 68% to $338 million, hit by shipment volumes and sales mix, which were partially offset by lower R & E and administrative and production costs.

Small agriculture and turf sales fell 28% to $1.748 billion to miss the $1.960 billion FactSet consensus.

Construction and forestry sales tumbled 38% to $1.994 billion. Financial services sales rose 11% to $230 million

The stock has gained 25.7% in the last 12 months, while the S&P 500 SPX has gained 22.2%.