Core Points - Deere & Company (DE.US) shares fell nearly 8% to $472.59 following the release of its third-quarter financial results [1] - The company's net profit decreased by 26% year-over-year to $1.289 billion, with earnings per share dropping to $4.75 [1] - Deere has revised its fiscal year 2025 net income outlook down to $4.75 billion to $5.25 billion, from a previous range of $4.75 billion to $5.5 billion [1] - Sales in the production and precision agriculture segment for the third quarter of 2025 declined by 16% year-over-year to $4.27 billion, attributed to an oversupply of used equipment, which has suppressed demand for new equipment [1]

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Financial Data and Key Metrics Changes - Net sales and revenues decreased by 9% to DKK 12.018 billion, with equipment operations net sales also down 9% to DKK 10.357 billion [10] - Net income attributable to Deere and Company was €1.289 billion, or $4.75 per diluted share [10] Business Segment Data and Key Metrics Changes - Production and Precision Ag segment net sales fell 16% year over year to €4.273 billion, primarily due to lower shipment volumes and unfavorable price realization [10][11] - Small Ag and Turf segment net sales decreased by 1% year over year to €3.025 billion, with operating profit declining slightly to €485 million, resulting in a 16% operating margin [12] - Construction and Forestry segment net sales were down 5% year over year to DKK 3.059 billion, with an operating profit of €237 million and a 7.7% operating margin [19][20] Market Data and Key Metrics Changes - In the U.S. and Canada, large ag equipment industry sales are expected to decline approximately 30% in fiscal year 2025 due to high interest rates and elevated used inventory levels [13] - Small ag and turf industry demand in the U.S. and Canada is projected to decrease by 10% [14] - European market sentiment is improving, with expectations for industry sales to be flat to down 5% in fiscal year 2025 [15] Company Strategy and Development Direction - The company is focused on disciplined execution amidst challenging market dynamics, with a strong emphasis on managing production costs and inventory levels [6][8] - Deere is positioning itself to respond effectively to market demand inflections, having reduced inventories significantly across all business segments [29][32] - The company is investing in technology and precision agriculture solutions to drive future growth and improve customer outcomes [59][110] Management's Comments on Operating Environment and Future Outlook - Management noted that global uncertainty and high interest rates are impacting customer sentiment, leading to cautious capital purchases [28] - Despite challenges, there are signs of optimism in certain markets, with improved retail sales and order activity in specific segments [9][44] - The company remains committed to delivering long-term value for customers and shareholders, leveraging its operational efficiencies and market position [67][68] Other Important Information - Tariff costs in the quarter were approximately $200 million, with a forecasted pretax impact of nearly $600 million for fiscal year 2025 [37][38] - The company has seen a positive response to pricing actions taken in the North American earthmoving market, with retail settlements up mid-single digits year over year [39] Q&A Session Summary Question: Can you provide additional color on the quarter's performance? - Management highlighted the challenges posed by global trade dynamics and interest rate expectations, emphasizing the importance of focusing on controllable factors like production and inventory management [28] Question: What are the expectations for production in relation to retail demand next year? - Management indicated that production is expected to align closely with retail demand, particularly in large ag, while small ag and turf may see some lift due to underproduction this year [75] Question: Can you elaborate on the early order programs and their trends? - Management noted that while there is caution in ordering due to market uncertainty, early returns on planters and combines are positive, though it is still early in the programs [81][82] Question: How is the company addressing pricing competition in the market? - Management acknowledged the competitive pricing environment but expressed optimism about the market's ability to bear higher pricing, especially with positive retail sales trends [86] Question: What is the outlook for cash flow guidance? - Management explained that the cash flow guidance remains unchanged due to the uncertain environment, but they feel confident about inventory levels and retail sales trends [94]

Financial Data and Key Metrics Changes - Net sales and revenues decreased by 9% to DKK 12.018 billion, with equipment operations net sales also down by 9% to DKK 10.357 billion [9] - Net income attributable to Deere & Company was €1.289 billion, or $4.75 per diluted share [9] - Operating margin for equipment operations was reported at 12.6% [5] Business Segment Data and Key Metrics Changes - **Production and Precision Ag**: Net sales decreased by 16% year over year to €4.273 billion, primarily due to lower shipment volumes and unfavorable price realization [10] - **Small Ag and Turf**: Net sales were down 1% year over year to €3.025 billion, with a slight decline in shipment volumes offset by positive currency translation [11] - **Construction and Forestry**: Net sales decreased by 5% year over year to DKK 3.059 billion, mainly due to unfavorable price realization [17] Market Data and Key Metrics Changes - In the U.S. and Canada, large ag equipment industry sales are expected to decline by approximately 30% in fiscal year 2025 due to high interest rates and elevated used inventory levels [12] - Small ag and turf industry demand in the U.S. and Canada is projected to be down 10% [13] - European market sentiment is improving, with expectations for industry sales to be flat to down 5% in fiscal year 2025 [14] Company Strategy and Development Direction - The company is focused on disciplined execution amidst challenging market dynamics, managing production costs, and inventory levels effectively [5][6] - There is an emphasis on responding proactively to market downturns and maintaining robust investment levels for future growth [65] - The company aims to build production in line with retail demand as market conditions improve [26][65] Management's Comments on Operating Environment and Future Outlook - Management noted that global uncertainty and high interest rates continue to weigh on customer sentiment, but there are signs of improved demand in certain segments [5][6] - The company remains optimistic about its order books and is well-positioned to respond to demand growth when it returns [7][65] - Management highlighted the importance of managing costs and production efficiency to navigate the current economic environment [30][32] Other Important Information - Tariff costs in the quarter were approximately $200 million, with a forecasted pretax impact of nearly $600 million for fiscal year 2025 [32][33] - The company has seen significant reductions in inventory levels across various segments, positioning itself well for future demand [26][27] Q&A Session Summary Question: Production to retail demand expectations - Management indicated that production levels could align closely with retail sales increases, particularly in large ag, while small ag and turf may see some lift due to underproduction this year [70][73] Question: Early order programs insights - Management noted that planter programs are seeing cautious ordering, while early responses for combines are positive but still early in the cycle [76][79] Question: Pricing and market competition - Management acknowledged competitive pricing pressures but noted positive market responses to recent pricing actions, with expectations for some price moderation in the fourth quarter [97][99] Question: Cash flow guidance variability - Management explained that the cash flow guidance range reflects uncertainties in the market, but they feel confident about inventory levels and retail sales trends [91][94] Question: Tariff impacts and mitigation strategies - Management provided details on the tariff costs and their allocation among business units, emphasizing ongoing efforts to mitigate these impacts [114]

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].