Deere Reports First Quarter Net Income of $869 Million
PR Newswire
MOLINE, Ill., Feb. 13, 2025
-- Full-year net income forecast remains steady despite currency
fluctuations.
-- Results reflect progress in streamlining field inventory amidst uncertain
market conditions.
-- Continued value delivery as customers navigate a challenging environment.
MOLINE, Ill., Feb. 13, 2025 /PRNewswire/ -- Deere & Company (NYSE: DE) reported net income of $869 million for the first quarter ended January 26, 2025, or $3.19 per share, compared with net income of $1,751 million, or $6.23 per share, for the quarter ended January 28, 2024.
Worldwide net sales and revenues decreased 30 percent, to $8.508 billion, in the most recent quarter. Net sales were $6.809 billion for the quarter, compared with $10.486 billion in 2024.
"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," said John C. May, chairman and chief executive officer. "We're seeing compelling evidence that our efforts are positioning the company to successfully navigate the current environment."
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2025 is forecasted to remain in a range of $5.0 billion to $5.5 billion.
"The stability of our net income guidance not only reflects our resilience in a challenging market but also enables our sustained strategic investments to provide better outcomes for our customers," May added.
Deere & Company First Quarter
-------------------------
$ in millions, except per share
amounts 2025 2024 % Change
-------------------------------------- ------ ------- --------
Net sales and revenues $8,508 $12,185 -30 %
Net income $ 869 $ 1,751 -50 %
Fully diluted EPS $ 3.19 $ 6.23
Results for the current period were affected by special items. See Note 1 of the financial statements for further details.
Production & Precision Agriculture First Quarter
--------------------------
$ in millions 2025 2024 % Change
----------------------------------- ------- ------- --------
Net sales $ 3,067 $ 4,849 -37 %
Operating profit $ 338 $ 1,045 -68 %
Operating margin 11.0 % 21.6 %
Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower SA&G and R&D expenses and lower production costs.
Small Agriculture & Turf First Quarter
-------------------------
$ in millions 2025 2024 % Change
------------------------- ------ ------- --------
Net sales $1,748 $ 2,425 -28 %
Operating profit $ 124 $ 326 -62 %
Operating margin 7.1 % 13.4 %
Small agriculture and turf sales decreased for the quarter as a result of lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower production costs.
Construction & Forestry First Quarter
-------------------------
$ in millions 2025 2024 % Change
------------------------ ------ ------- --------
Net sales $1,994 $ 3,212 -38 %
Operating profit $ 65 $ 566 -89 %
Operating margin 3.3 % 17.6 %
Construction and forestry sales decreased for the quarter as a result of lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, unfavorable price realization, and higher SA&G and R&D expenses.
Financial Services First Quarter
--------------------
$ in millions 2025 2024 % Change
------------------- ---- ---- --------
Net income $230 $207 11 %
Financial services net income for the current quarter was affected by a decreased valuation allowance on assets held for sale of Banco John Deere S.A. See Note 1 of the financial statements for further details. Excluding the impact of this special item, net income decreased due to a higher provision for credit losses, partially offset by lower SA&G expenses.
Industry Outlook for Fiscal 2025
--------------------------------------- ---------------
Agriculture & Turf
U.S. & Canada:
Large Ag Down 30%
Small Ag & Turf Down 10%
Europe Down 5%
South America (Tractors & Combines) Flat
Asia Down slightly
Construction & Forestry
U.S. & Canada:
Construction Equipment Down 10%
Compact Construction Equipment Down 5%
Global Forestry Flat to down 5%
Global Roadbuilding Flat
Deere Segment Outlook for Fiscal 2025
This outlook does not reflect the impacts of potential import tariffs by the U.S. and retaliatory actions taken by other countries given the uncertain and rapidly evolving environment.
Currency Price
$ in millions Net Sales Translation Realization
------------------------- --------------- ----------- -----------
Production & Precision Ag Down 15 to 20% -2.5 % +1.0 %
Small Ag & Turf Down 10% -1.5 % +0.5 %
Construction & Forestry Down 10 to 15% -1.5 % Flat
Financial Services Net Income $750
FORWARD-LOOKING STATEMENTS
Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," "Deere Segment Outlook, " and "Condensed Notes to Interim Consolidated Financial Statements" relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.
Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:
-- the agricultural business cycle, which can be unpredictable and is
affected by factors such as world grain stocks, harvest yields, available
farm acres, acreage planted, soil conditions, prices for commodities and
livestock, input costs, availability of transport for crops as well as
adverse macroeconomic conditions, including unemployment, inflation,
interest rate volatility, changes in consumer practices due to slower
economic growth, and regional or global liquidity constraints;
-- government policies and actions in respect to global trade, tariffs, and
trade agreements, and the uncertainty of the company's ability to sell
products domestically or internationally, continue production at certain
international facilities, procure raw materials and components,
accurately forecast demand and inventory, manage increased costs of
production, absorb or pass on increased pricing, predict financial
results, and remain competitive based on these actions and policies;
-- higher interest rates and currency fluctuations which could adversely
affect the U.S. dollar, customer confidence, access to capital, and
demand for the company's products and solutions;
-- the company's ability to adapt in highly competitive markets, including
understanding and meeting customers' changing expectations for products
and solutions, including delivery and utilization of precision
technology;
-- housing starts and supply, real estate and housing prices, levels of
public and non-residential construction, and infrastructure investment;
-- political, economic, and social instability of the geographies in which
the company operates, including the ongoing war between Russia and
Ukraine and the conflicts in the Middle East;
-- worldwide demand for food and different forms of renewable energy
impacting the price of farm commodities and consequently the demand for
the company's equipment;
-- investigations, claims, lawsuits, or other legal proceedings, including
the recent lawsuit filed by the Federal Trade Commission $(FTC.UK)$ and the
Attorneys General of the States of Arizona, Illinois, Michigan, Minnesota,
and Wisconsin alleging that the company unlawfully withheld self-repair
capabilities from farmers and independent repair providers;
-- changes in climate patterns, unfavorable weather events, and natural
disasters, including potential consequences from the recent California
wildfires;
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February 13, 2025 06:20 ET (11:20 GMT)