ETFs in Spotlight as Deere Slumps After Q4 Earnings Fall 14% Y/Y

Core Insights - Deere Company's shares fell by 5.7% following a 14% year-over-year decline in fourth-quarter fiscal 2025 earnings, attributed to increased production costs and tariff impacts, with earnings missing the Zacks Consensus Estimate by 0.8% [1] Financial Performance - Net sales from equipment operations increased by 14% year over year, exceeding the Zacks Consensus Estimate by 5.9%, but gross profit decreased by 2% due to a 21% rise in quarterly cost of sales [4] - Segment-wise performance showed a 10% increase in sales from the Production & Precision Agriculture unit, a 7% increase from the Small Agriculture & Turf unit, a 27% surge in Construction & Forestry sales, and a 2% rise in revenues from the Financial Services division [5] - Cash flow from operating activities was reported at $7.46 billion for fiscal 2025, down from $9.23 billion the previous year [5] - For fiscal 2026, the company anticipates net income in the range of $4.00-$4.75 billion, indicating a significant decline from the reported net income of $5.03 billion in fiscal 2025 [6] Industry Context - The U.S. agricultural sector has been facing challenges over the past few years, with conditions worsening since April 2025, leading to weak demand for large agricultural equipment and impacting revenue prospects for manufacturers like Deere [2] - ETF investors with significant allocations to funds holding Deere may need to reassess their portfolios to mitigate potential losses if the sector's demand continues to decline [2] ETF Insights - iShares MSCI Agriculture Producers ETF (VEGI) has assets of $85.7 million, with Deere holding a 25.5% weightage, and the fund has gained 11% year to date [7] - VanEck Agribusiness ETF (MOO) has assets of $578.8 million, with Deere at 8.15% weightage, and the fund has increased by 12.8% year to date [8] - Strive Natural Resources and Security ETF (FTWO) has assets of $53.2 million, with Deere at 8.32% weightage, and the fund has surged 38.7% year to date [9] - First Trust Indxx Global Agriculture ETF (FTAG) has assets of $6.2 million, with Deere at 10.01% weightage, and the fund has risen 12.9% year to date [11] - Global X AgTech & Food Innovation ETF (KROP) has assets of $6.30 million, with Deere at 11.84% weightage, and the fund has gained 8.2% year to date [12][13]