Core Viewpoint - Deere & Company (DE.US) experienced a significant decline in stock price, dropping over 7.5% to $474.83, following the release of its third-quarter financial results which showed continued revenue and profit declines [1] Financial Performance - The company's third-quarter revenue decreased by 8.6% year-over-year to $12.02 billion, marking the eighth consecutive quarter of decline, although it surpassed analysts' average expectation of $11.86 billion [1] - Net profit fell by 25.7% year-over-year to $1.29 billion, translating to earnings per share of $4.75, which exceeded the expected $4.58 [1] Market Conditions - CEO John May indicated that customer sentiment remains cautious due to uncertainties surrounding trade policies and economic conditions [1] - The company is actively addressing the issue of a large number of used equipment in the industry [1]

Financial Performance - Deere reported $10.36 billion in revenue for the quarter ended July 2025, reflecting a year-over-year decline of 9.1% [1] - The earnings per share (EPS) for the same period was $4.75, down from $6.29 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $10.26 billion by 0.97%, while the EPS surprised by 2.81% against the consensus estimate of $4.62 [1] Segment Performance - Equipment Operations net sales were $10.36 billion, surpassing the six-analyst average estimate of $10.18 billion, but still down 9.1% year-over-year [4] - Construction & Forestry net sales reached $3.06 billion, slightly below the $3.11 billion average estimate, marking a 5.4% decline year-over-year [4] - Agriculture and Turf net sales totaled $7.3 billion, exceeding the $7.07 billion average estimate, but down 10.5% year-over-year [4] - Small Ag & Turf net sales were $3.03 billion, outperforming the five-analyst average estimate of $2.78 billion, with a minor decline of 0.9% year-over-year [4] - Production & Precision Ag net sales were $4.27 billion, slightly below the $4.28 billion average estimate, reflecting a significant 16.2% year-over-year decline [4] Financial Services - Financial services revenues amounted to $1.42 billion, below the $1.51 billion estimate, representing a 4.8% decline year-over-year [4] - Total financial services revenue was $1.54 billion, compared to the $1.62 billion estimate, indicating a 7.4% year-over-year decrease [4] - Finance and Interest Income from financial services was $1.43 billion, below the $1.49 billion estimate, down 6.8% year-over-year [4] Stock Performance - Shares of Deere have returned +1.1% over the past month, compared to the Zacks S&P 500 composite's +3.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

3Q 2025 Financial Performance - Net sales and revenues increased by 9% from $12.018 billion in 3Q 2024 to $13.152 billion in 3Q 2025[7] - Net sales for Equipment Operations increased by 9% from $10.357 billion in 3Q 2024 to $11.387 billion in 3Q 2025[7] - Net income attributable to Deere & Company decreased by 26% from $1.734 billion in 3Q 2024 to $1.289 billion in 3Q 2025[7] - Diluted EPS decreased by 24% from $6.29 per share in 3Q 2024 to $4.75 per share in 3Q 2025[7] Segment Performance - Production and Precision Ag net sales decreased by 16% from $5.099 billion in 3Q 2024 to $4.273 billion in 3Q 2025[9] - Small Ag and Turf net sales slightly decreased by 1% from $3.053 billion in 3Q 2024 to $3.025 billion in 3Q 2025[11] - Construction and Forestry net sales decreased by 5% from $3.235 billion in 3Q 2024 to $3.059 billion in 3Q 2025[22] - Financial Services net income increased from $153 million in 3Q 2024 to $205 million in 3Q 2025[30] FY 2025 Outlook - The company forecasts a net income attributable to Deere & Co of $4.75-5.25 billion[32] - The company anticipates net operating cash flow of $4.5-5.5 billion[32]

Group 1 - Deere reported quarterly earnings of $4.75 per share, exceeding the Zacks Consensus Estimate of $4.62 per share, but down from $6.29 per share a year ago, representing an earnings surprise of +2.81% [1] - The company posted revenues of $10.36 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 0.97%, but down from $11.39 billion year-over-year [2] - Deere has outperformed the S&P 500 with a 21.2% increase in shares since the beginning of the year compared to the S&P 500's gain of 10% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $4.32 on revenues of $9.81 billion, and for the current fiscal year, it is $18.84 on revenues of $38.05 billion [7] - The Zacks Industry Rank for Manufacturing - Farm Equipment is currently in the bottom 15% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Deere & Company reported a net income of $1.289 billion for Q3 2025, down 26% from $1.734 billion in Q3 2024, translating to earnings per share of $4.75 compared to $6.29 a year earlier [1][4][16] - For the first nine months of 2025, net income was $3.962 billion, a decrease of 32% from $5.855 billion in the same period of 2024 [1][4][16] - Total net sales and revenues decreased by 9% to $12.018 billion in Q3 2025 and by 18% to $33.290 billion for the nine months [2][4][16] Segment Performance - Production & Precision Agriculture segment saw net sales drop by 16% to $4.273 billion and operating profit fell by 50% to $580 million [5][16] - Small Agriculture & Turf segment reported a slight sales decrease of 1% to $3.025 billion, with operating profit down 2% to $485 million [6][16] - Construction & Forestry segment experienced a 5% decline in sales to $3.059 billion and a 47% drop in operating profit to $237 million [7][16] Company Outlook - The company forecasts net income for fiscal 2025 to be in the range of $4.75 billion to $5.25 billion [3][10] - Deere's management emphasized a commitment to addressing customer needs and preparing for future growth through advanced technologies [4][10] Industry Outlook - The agricultural equipment market in the U.S. and Canada is expected to decline approximately 30% for large agriculture and about 10% for small agriculture and turf [9][11] - In Europe, the market is projected to be flat to down 5%, while South America is expected to remain flat for tractors and combines [9][11]

Financial Performance - Deere & Company reported a net income of $1.289 billion for Q3 2025, a decrease of 26% from $1.734 billion in Q3 2024, resulting in earnings per share of $4.75 compared to $6.29 last year[1][6]. - Worldwide net sales and revenues decreased by 9% to $12.018 billion for Q3 2025, and by 18% to $33.290 billion for the first nine months of the year[2][22]. - The company forecasts full-year net income for fiscal 2025 to be in the range of $4.75 billion to $5.25 billion[3][5]. - Deere's total operating profit for Q3 2025 was $1.568 billion, a decrease of 32% from $2.297 billion in Q3 2024[22]. - Net income attributable to Deere & Company for the nine months ended July 27, 2025, was $3,962 million, down 32.3% from $5,855 million in the same period of 2024[25]. - Net income attributable to Deere & Company for the three months ended July 27, 2025, was $1,084 million, down from $1,581 million in the same period of 2024, representing a decline of 31.4%[41]. - Total net income for the nine months ended July 27, 2025, was $3,938 million, down from $5,846 million in the same period of 2024, a decline of 32.6%[44]. - Net income for the nine months ended July 27, 2025, was $3,341 million, a decrease of 37.2% from $5,323 million in 2024[49]. Segment Performance - The Production & Precision Agriculture segment saw net sales drop by 16% to $4.273 billion, with operating profit declining by 50% to $580 million[7][22]. - Small Agriculture & Turf net sales decreased by 1% to $3.025 billion, with operating profit down 2% to $485 million[10][22]. - Construction & Forestry segment net sales fell by 5% to $3.059 billion, and operating profit decreased by 47% to $237 million[13][22]. Cash Flow and Investments - Cash flows from operating activities for the nine months ended July 27, 2025, were $3,464 million, a decrease from $4,139 million in the same period of 2024[29]. - The company reported a net cash used for investing activities of $801 million for the nine months ended July 27, 2025, compared to $3,671 million in the same period of 2024[29]. - Cash flows from operating activities totaled $3,338 million in 2025, down from $5,702 million in 2024, reflecting a decline of 41.5%[49]. - The company repurchased common stock amounting to $1,136 million in 2025, down from $3,227 million in 2024, reflecting a decrease of 64.8%[49]. Assets and Liabilities - The total assets as of July 27, 2025, were $107,817 million, compared to $107,841 million as of July 28, 2024[27]. - Total liabilities as of July 27, 2025, were $82,553 million, a decrease from $84,692 million as of July 28, 2024[27]. - Stockholders' equity for Deere & Company increased to $25.175 billion in July 2025, compared to $22.836 billion in July 2024, marking an increase of 10.2%[47]. - Total liabilities decreased to $82.553 billion in July 2025 from $84.395 billion in July 2024, a reduction of 2.2%[47]. Research and Development - Research and development expenses for the nine months ended July 27, 2025, were $1,631 million, slightly down from $1,664 million in the same period of 2024[44]. Market Outlook - Deere's outlook for the agriculture and turf market in the U.S. and Canada indicates a decline of approximately 30% for large agriculture and 10% for small agriculture and turf[16][18]. Technology and Innovation - The company is committed to advancing technologies like See & Spray and Harvest Settings Automation to enhance customer productivity[4][18]. Other Financial Metrics - The provision for income taxes for the three months ended July 27, 2025, was $339 million, compared to $625 million in the same period of 2024, a decrease of 45.8%[41]. - The provision for credit losses increased to $258 million in 2025 from $222 million in 2024, representing a rise of 16.2%[49].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: U.S. Machinery and Electricals - **Focus**: Impact of recent policy changes by the Trump Administration on various sub-sectors including electricals, construction, agriculture, and trucks [1][11] Core Insights and Arguments 1. Policy Impact on Renewables - The Trump Administration's policies are de-prioritizing renewables, negatively impacting companies like Quanta (PWR) which derives 30% of sales from this sector [2][49] - The OBBBA cuts tax credits for renewables, shortening the eligibility timeframe from 2032 to 2027, leading to a projected slowdown in construction activity post-2025 [16][54] - Construction costs are rising due to stricter domestic content requirements and tariffs, which could drive renewables to ex-growth from 2025-2030 [2][18] 2. Construction Sector Stimulus - The reinstatement of 100% bonus depreciation for qualified property under the OBBBA is expected to stimulate construction activity, unlocking nearly $90 billion in additional non-residential construction spending, a 7% increase compared to 2024 levels [3][67] - This change is anticipated to benefit construction OEMs such as OSK, URI, ETN, CAT, TRMB, HUBB, DE, and J [3][12] 3. Agriculture Equipment Demand - Changes in biofuels policy, including a 75% increase in biomass-based diesel production mandated by the EPA, could lead to a 10% increase in agricultural equipment demand [4][84] - The extension of clean fuel tax credits from 2027 to 2029 and increased subsidies for biofuels are expected to positively impact companies like Deere, AGCO, and CNH [4][101] 4. Truck OEM Competitive Landscape - The Section 232 investigation into commercial vehicle manufacturing is likely to favor U.S.-based manufacturers like PACCAR (PCAR) by reversing the current tariff structure that disadvantages U.S. manufacturers [5][104] - Current tariffs create a cost disadvantage for U.S. truck manufacturers, as they face higher costs due to imported components [107][110] Additional Important Insights - The overall economic reorientation towards investment rather than consumption is expected to benefit the machinery and electrical sectors [13] - The anticipated slowdown in renewable energy construction does not imply a complete decline, as electricity demand continues to grow at a CAGR of 1.5-2% [28][40] - Historical context indicates that previous cuts to renewable tax credits led to significant underperformance in the sector, suggesting potential risks ahead [46] - The bonus depreciation changes are expected to lead to mid-single-digit earnings growth for companies like Oshkosh, Eaton, and United Rentals [79][82] Company Ratings and Price Targets - **Outperform Ratings**: Trimble (TP $99), Jacobs (TP $163), PACCAR (TP $118), Eaton (TP $410), Hubbell (TP $511) [7][8] - **Market-Perform Ratings**: AGCO (TP $118), Caterpillar (TP $447), Deere (TP $548), Cummins (TP $385), United Rentals (TP $885), Titan America (TP $15), Oshkosh (TP $132), Quanta (TP $410) [7][8] This summary encapsulates the key points discussed in the conference call, highlighting the implications of policy changes on various sectors and companies within the U.S. Machinery and Electricals industry.

Core Insights - Deere & Company (DE) is set to report its third-quarter fiscal 2025 results on August 14, with earnings estimated at $4.62 per share, reflecting a 26.6% decline year-over-year, and revenues projected at $10.3 billion, indicating a 9.9% year-over-year decrease [1] Earnings Performance - Deere has consistently exceeded Zacks Consensus Estimates in the last four quarters, with an average surprise of 11.1% [2] - The reported earnings for the last four quarters were significantly above estimates, with the most recent quarter showing a surprise of 16.90% [3] Earnings Prediction - The model predicts an earnings beat for Deere, supported by a positive Earnings ESP of +0.58% and a Zacks Rank of 3 (Hold) [4][5] Segment Performance Expectations - Production & Precision Agriculture segment revenues are expected to decline by 15.6% to $4.30 billion, with operating profit anticipated to fall by 49.8% to $583 million [6][9] - Small Agriculture & Turf segment revenues are projected to decrease by 12.3% to $2.68 billion, with operating profit estimated at $359 million, a 27.7% decline [10] - Construction & Forestry segment sales are expected to dip by 0.7% to $3.21 billion, with operating profit predicted to plunge by 43.2% to $942 million [11] - Financial Services segment revenues are forecasted to rise by 5.1% to $1.56 billion, with operating profit expected to reach $204 million [12] Market Context - Deere's stock has increased by 49% over the past year, outperforming the industry growth of 46.1% [13]

Core Insights - Deere (NYSE: DE) is expected to release earnings on August 14, 2025, with analysts predicting earnings of $4.59 per share and revenues of $10.33 billion, a decline from the previous year's earnings of $6.29 per share and revenues of $11.39 billion [4] - Over the past five years, Deere's stock has increased by 100%, outperforming the S&P 500, which gained around 70% during the same period, indicating a better fit for long-term investors rather than short-term traders [3] - The company's current market capitalization stands at $138 billion, with $44 billion in revenue over the past twelve months, yielding an operating profit of $9.4 billion and a net income of $5.7 billion [5] Trading Strategies - For event-driven traders, two main strategies are suggested: assessing historical probabilities to take positions before earnings and analyzing immediate and medium-term returns post-earnings to adjust positions accordingly [7] - Historical data shows that in the past five years, Deere's stock had a balanced distribution in one-day performance post-earnings, with 50% of cases resulting in negative returns (median -3.1%) and 50% in positive returns (median +5.2%) [10] Correlation and Performance - There is a correlation between short-term (1D) and medium-term (5D, 21D) returns following earnings, which can be leveraged for trading strategies [8] - The performance of peers can influence Deere's stock reaction post-earnings, with historical comparisons showing how peer earnings impact stock performance [9]

Core Viewpoint - Deere (DE) is expected to report a significant decline in quarterly earnings and revenues, with analysts predicting earnings of $4.62 per share, a decrease of 26.6% year-over-year, and revenues of $10.26 billion, down 9.9% from the previous year [1]. Earnings Projections - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating that analysts have not revised their initial projections [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts estimate that 'Net Sales and Revenues- Equipment Operations- Net sales' will reach $10.18 billion, reflecting a year-over-year decline of 10.6% [5]. - 'Net Sales and Revenues- Construction & forestry net sales' is projected to be $3.11 billion, indicating a decrease of 4% year-over-year [5]. - 'Net Sales and Revenues- Agriculture and Turf' is expected to be $7.07 billion, down 13.3% from the prior-year quarter [6]. - 'Net Sales and Revenues- Small ag & turf net sales' is forecasted at $2.78 billion, a decline of 8.9% year-over-year [6]. - The estimate for 'Net Sales and Revenues- Production & precision ag net sales' stands at $4.28 billion, reflecting a 16% decrease from the year-ago quarter [7]. - Overall 'Net Sales and Revenues- Net sales' is projected to be $10.17 billion, down 10.7% year-over-year [7]. - 'Net Sales and Revenues- Other revenues' is expected to reach $274.89 million, indicating a slight decline of 0.4% [7]. Financial Services Revenue - Analysts predict 'Net Sales and Revenues- Financial services revenues' will likely reach $1.51 billion, showing a year-over-year increase of 1.7% [8]. - 'Net Sales and Revenues- Financial services- Total' is expected to be $1.62 billion, reflecting a decrease of 3.1% year-over-year [8]. - 'Net Sales and Revenues- Financial services- Finance and Interest Income' is projected at $1.49 billion, indicating a decline of 3.3% [9]. - 'Net Sales and Revenues- Financial services- Other Income' is estimated at $129.33 million, down 0.5% year-over-year [9]. - The estimate for 'Net Sales and Revenues- Equipment Operations- Finance and interest income' is $134.75 million, reflecting a year-over-year decline of 13.1% [10]. Stock Performance - Shares of Deere have experienced a decline of 0.4% over the past month, contrasting with a 2.7% increase in the Zacks S&P 500 composite [11]. - With a Zacks Rank of 3 (Hold), Deere is expected to perform in line with the overall market in the near future [11].