Deere Q1 Earnings Top Estimates, Sales Fall Y/Y on Low Volumes

Core Insights - Deere & Company reported first-quarter fiscal 2025 earnings of $3.19 per share, exceeding the Zacks Consensus Estimate of $3.13, but reflecting a 49% decline from the prior-year quarter due to lower shipment volumes [1] - Net sales for equipment operations were $6.81 billion, down 35.1% year over year, missing the Zacks Consensus Estimate of $7.70 billion. Total net sales, including financial services, were $8.51 billion, down 30% from the previous year [2] Financial Performance - The cost of sales decreased by 30% year over year to $5.04 billion, while total gross profit fell 46.1% to $1.77 billion. Selling, administrative, and general expenses decreased by 8.8% to $972 million [3] - Total operating profit, including financial services, declined 64% year over year to $793 million [3] Segment Performance - Production & Precision Agriculture segment sales fell 37% year over year to $3.1 billion, with operating profit declining 68% to $338 million [4] - Small Agriculture & Turf sales decreased by 28% to $1.75 billion, with operating profit down 62% to $124 million [5] - Construction & Forestry sales were $1.99 billion, down 38% year over year, and operating profit decreased 89% to $65 million [6] - Financial Services division revenues were $1.45 billion, up 1.5% year over year, with operating income increasing to $266 million [7] Cash and Debt Position - At the end of the first quarter of fiscal 2025, cash and cash equivalents were $6.6 billion, down from $7.3 billion at the end of fiscal 2024. Cash used in operating activities was $1.13 billion, compared to an outflow of $0.91 billion in the prior-year quarter. Long-term debt increased to $43.4 billion from $43.2 billion [8] 2025 Guidance - The company expects net income for fiscal 2025 to be between $5 billion and $5.5 billion. Net sales for Production & Precision Agriculture are projected to decrease by 15-20%, Small Agriculture & Turf sales are expected to decline by 10%, and Construction & Forestry sales are projected to decrease by 10-15% [10] Share Price Performance - Deere's shares have increased by 25.7% over the past year, outperforming the industry's growth of 21.6% [11]