Core Viewpoint - Deere & Company is facing significant challenges due to a projected $1.2 billion tariff impact in fiscal 2026, which overshadows its recent earnings performance [1][2]. Financial Performance - Despite exceeding earnings estimates, Deere anticipates a decline in net income for fiscal 2026, projecting it to fall between $4.0 billion and $4.75 billion, down from over $5 billion in fiscal 2025 [2]. - The company reported a 30% decline in the North American large agriculture industry this year, yet managed to deliver margins that are over 450 basis points better than in 2016, the last comparable cycle [6]. Inventory and Cost Management - Deere has significantly reduced its inventory levels, with the inventory for its largest tractors reaching a 17-year low, indicating aggressive cost management in response to falling demand [4]. - The company is committed to inventory management and cost control to navigate the ongoing margin pressures from tariffs and challenges in the large agriculture sector [5]. Market Outlook - Executives view fiscal 2026 as a transitional year, suggesting that it may mark the bottom of the large agriculture cycle, while also indicating growth in other segments [5]. - Deere expects its construction and forestry business, along with its small agriculture and turf segment, to grow approximately 10% in fiscal 2026 [5]. Stock Performance - Year-to-date, Deere shares have increased by 12.36%, but this is lower than the S&P 500's return of 16.09% during the same period, with a minimal annual gain of 0.83% [6]. - Following the earnings report, Deere's stock fell by 5.67% to $469.87 per share [6].

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Financial Data and Key Metrics Changes - For fiscal year 2025, net sales and revenues decreased by 12% to $45.7 billion, while net sales for equipment operations fell by 13% to $38.9 billion [8] - Net income attributable to Deere & Company was $5 billion, or $18.50 per diluted share [8] - In the fourth quarter, net sales and revenues increased by 11% to $12.4 billion, with net sales for equipment operations rising by 14% to $10.6 billion [8] - Net income attributable to Deere & Company for the fourth quarter decreased to $1.1 billion, or $3.93 per diluted share [8] Business Segment Data and Key Metrics Changes - Production and Precision Ag segment saw net sales of $4.74 billion, up 10% year-over-year, with an operating profit of $604 million and a 12.7% operating margin [9] - Small Ag and Turf segment reported net sales of $2.57 billion, up 7% year-over-year, but operating profit declined to $25 million due to higher costs [10] - Construction and Forestry segment's net sales increased by 27% year-over-year to $3.382 billion, with an operating profit of $348 million and a 10.3% operating margin [13] Market Data and Key Metrics Changes - Industry sales of large equipment in the U.S. and Canada are expected to decline by 15%-20% in fiscal year 2026, while small agriculture and turf demand is estimated to be flat to up 5% [10][11] - In Europe, the industry is projected to be flat to up 5%, with robust dairy sector margins and improving arable cash flows [11] - South America is expected to see flat industry sales, with Brazilian customer demand tempered by high interest rates and strong global crop yields [11] Company Strategy and Development Direction - The company aims to manage inventory carefully and avoid oversupply while focusing on used inventory reduction [37] - Deere is committed to advancing its Smart Industrial journey, emphasizing technology and innovation to enhance customer value [20][23] - The company anticipates growth in small ag and turf, as well as construction and forestry, while entering fiscal year 2026 with lean production in North American large ag [67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization in certain segments and geographies, despite challenges in large ag [7][8] - The company highlighted strong crop use and consumption, new trade agreements, and supportive government payments as potential growth drivers [11] - Management acknowledged the resilience of the organization in navigating a challenging market environment while maintaining strong performance levels [20][26] Other Important Information - The company expects full-year net income for fiscal year 2026 to be in the range of $4 billion to $4.75 billion, with an effective tax rate between 25%-27% [17] - Cash flow from equipment operations is projected to be between $4 billion and $5 billion [17] - The company plans to resume normal capital allocation activities in 2026 after pausing buybacks in the fourth quarter of fiscal 2025 [66] Q&A Session Summary Question: How is the company thinking about offsetting the $1.2 billion tariff headwind in 2026? - The company expects to capture back some of the incremental exposure this year and some from 2025, with a plan to continue executing activities to mitigate the impact [73][74] Question: Can you provide insights on the production plans and product mix implications for seasonality? - The company anticipates net sales in production precision ag to be close to the first quarter of 2025, but margins will be significantly lower due to a lean production plan [51]

Financial Data and Key Metrics Changes - In Q4 2025, net sales and revenues increased by 11% to $12.4 billion, while net sales for equipment operations rose by 14% to $10.6 billion. However, net income attributable to Deere & Company decreased to $1.1 billion, or $3.93 per diluted share [6][12]. - For the full year, net sales and revenues were down 12% to $45.7 billion, with net sales for equipment operations down 13% to $38.9 billion. Net income was $5 billion, or $18.50 per diluted share [6][12]. Business Segment Data and Key Metrics Changes - Production and Precision Ag segment saw net sales of $4.74 billion, up 10% year-over-year, with an operating margin of 12.7%. The increase was attributed to higher shipment volumes and favorable price realization [7]. - Small Ag and Turf segment reported net sales of $2.57 billion, up 7% year-over-year, but operating profit declined to $25 million due to higher tariffs and production costs [8]. - Construction and Forestry segment experienced a 27% increase in net sales to $3.382 billion, with an operating margin of 10.3% [12]. Market Data and Key Metrics Changes - The outlook for large equipment sales in North America is expected to decline by 15%-20%, while small ag and turf demand is estimated to be flat to up 5% [9][10]. - In Europe, the industry is projected to be flat to up 5%, with robust dairy sector margins and improving arable cash flows [10][43]. - South America is expected to see flat industry sales, with Brazil's demand tempered by high interest rates and strong global crop yields [10][11]. Company Strategy and Development Direction - The company aims to manage inventory carefully and avoid oversupply while focusing on used inventory reduction. This strategy is expected to position the market well for 2026 [34]. - The company is committed to advancing its smart industrial journey, emphasizing technology and innovation to enhance customer value and operational efficiency [20][66]. - The focus on R&D investment is expected to support future growth and unlock value for customers and shareholders [64][66]. Management's Comments on Operating Environment and Future Outlook - Management noted that fiscal 2025 was marked by significant challenges, but the company demonstrated resilience with over $5 billion in net income and strong operating margins [5][18]. - The company anticipates a subdued large ag market in North America for 2026 but sees growth opportunities in small ag, turf, and construction forestry segments [6][10]. - Management expressed optimism about stabilizing market conditions and the potential for growth driven by favorable commodity demand and government support for farmers [37][46]. Other Important Information - The company expects a full-year net income forecast for 2026 to be in the range of $4 billion to $4.75 billion, with a projected effective tax rate between 25%-27% [16]. - The company plans to resume normal capital allocation activities in 2026 after pausing buybacks in Q4 2025 due to market uncertainty [64]. Q&A Session Summary Question: How is the company thinking about offsetting the $1.2 billion tariff headwind in 2026? - The company expects to capture back some of the incremental exposure from tariffs through price-cost positive strategies and plans to take additional price increases as needed [70]. Question: Can you unpack the decremental margin on the sales decline in the Production and Precision Ag segment? - The company acknowledged that a significant portion of the decremental margin is attributed to tariffs, and they are working on improving profitability in other regions, particularly Brazil [74].

Financial Performance - FY2025 - Deere & Company's FY2025 net sales and revenues reached $51716 million, a 13% increase compared to $45684 million in FY2024[7] - Net sales for equipment operations in FY2025 were $44759 million, up 15% from $38917 million in FY2024[7] - Net income attributable to Deere & Company for FY2025 was $7100 million, a 29% increase compared to $5027 million in FY2024[7] - Diluted earnings per share (EPS) for FY2025 were $2552, a 28% increase compared to $1850 in FY2024[7] Financial Performance - 4Q2025 - Net sales and revenues for 4Q2025 were $12394 million, a 11% increase compared to $11143 million in 4Q2024[9] - Net sales for equipment operations in 4Q2025 were $10579 million, up 14% from $9275 million in 4Q2024[9] - Net income attributable to Deere & Company for 4Q2025 was $1065 million, a 14% decrease compared to $1245 million in 4Q2024[9] - Diluted earnings per share (EPS) for 4Q2025 were $393, a 14% decrease compared to $455 in 4Q2024[9] Segment Performance - 4Q2025 - Production & Precision Ag net sales in 4Q2025 were $4740 million, a 10% increase compared to $4305 million in 4Q2024[11] - Small Ag & Turf net sales in 4Q2025 were $2457 million, a 7% increase compared to $2306 million in 4Q2024[13] - Construction & Forestry net sales in 4Q2025 were $3382 million, a 27% increase compared to $2664 million in 4Q2024[24] Financial Outlook - FY2026 - Deere & Company forecasts a net income attributable to the company of $40-475 billion for FY2026[35] - The company anticipates an effective tax rate of 25-27% for FY2026[35] - Net operating cash flow for FY2026 is projected to be $40-50 billion[36] - Capital expenditures are expected to be approximately $14 billion[37]

Market Overview - U.S. stocks traded higher, with the Nasdaq Composite gaining over 100 points on Wednesday. The Dow rose 0.61% to 47,399.75, the NASDAQ increased 0.55% to 23,151.20, and the S&P 500 climbed 0.51% to 6,800.09 [1] - Utilities shares experienced a notable increase of 0.9% on Wednesday [1] Sector Performance - Communication services stocks fell by 0.3% on Wednesday [2] Company Specifics - Deere & Company (NYSE:DE) shares fell more than 4% after reporting fourth-quarter results and a disappointing fiscal 2026 outlook. The company reported earnings per share of $3.93, exceeding the consensus of $3.88, and an 11% year-over-year increase in quarterly sales to $12.39 billion, surpassing the consensus of $9.85 billion [3][4] - Deere expects fiscal 2026 net income to be between $4.0 billion and $4.75 billion, indicating a year-over-year decline of 20% to 5.5%, and projects operating cash flow of $4.0 billion to $5.0 billion [4] Commodity Market - In commodity news, oil traded up 0.1% to $57.99, gold increased by 1.1% to $4,186.70, silver rose 3.3% to $52.635, and copper gained 1.7% to $5.1765 [5] International Markets - European shares were higher, with the eurozone's STOXX 600 rising 0.9%, Spain's IBEX 35 Index up 0.9%, London's FTSE 100 increasing by 0.8%, Germany's DAX 40 gaining 0.7%, and France's CAC 40 rising 0.7% [6] - Asian markets closed mostly higher, with Japan's Nikkei gaining 1.85%, Hong Kong's Hang Seng up 0.13%, China's Shanghai Composite falling 0.15%, and India's BSE Sensex increasing by 1.21% [7] Stock Movements - Pasithea Therapeutics Corp. (NASDAQ:KTTA) shares surged 66% to $0.8100, while Amber International Holding Limited (NASDAQ:AMBR) rose 60% to $2.52 after reporting better-than-expected third-quarter sales and a $50 million buyback. Boqii Holding Limited (NYSE:BQ) shares increased by 47% to $2.59 [9] - Conversely, Lazydays Holdings, Inc. (NASDAQ:GORV) shares dropped 31% to $0.5284, and MingZhu Logistics Holdings Limited (NASDAQ:YGMZ) fell 24% to $0.1415 following an $8 million registered direct offering [9]

Market Overview - U.S. stocks traded higher, with the Nasdaq Composite gaining over 100 points on Wednesday. The Dow rose 0.61% to 47,399.75, the NASDAQ increased 0.55% to 23,151.20, and the S&P 500 climbed 0.51% to 6,800.09 [1] - Utilities shares experienced a notable increase of 0.9% on Wednesday [1] Sector Performance - Communication services stocks fell by 0.3% on Wednesday [2] Company Specifics - Deere & Company (NYSE:DE) shares fell more than 4% after reporting fourth-quarter results and a disappointing fiscal 2026 outlook. The company reported earnings per share of $3.93, exceeding the consensus of $3.88, and an 11% year-over-year increase in quarterly sales to $12.39 billion, surpassing the consensus of $9.85 billion [3][4] - Deere's fiscal 2026 net income is expected to be between $4.0 billion and $4.75 billion, indicating a year-over-year decline of 20% to 5.5%. The projected operating cash flow is estimated at $4.0 billion to $5.0 billion [4] Commodity Market - In commodity news, oil traded up 0.1% to $57.99, gold increased by 1.1% to $4,186.70, silver rose 3.3% to $52.635, and copper gained 1.7% to $5.1765 [5] International Markets - European shares were higher, with the eurozone's STOXX 600 rising 0.9%, Spain's IBEX 35 Index up 0.9%, London's FTSE 100 increasing by 0.8%, Germany's DAX 40 gaining 0.7%, and France's CAC 40 rising 0.7% [6] - Asian markets closed mostly higher, with Japan's Nikkei gaining 1.85%, Hong Kong's Hang Seng up 0.13%, China's Shanghai Composite falling 0.15%, and India's BSE Sensex increasing by 1.21% [7] Notable Stock Movements - Pasithea Therapeutics Corp. (NASDAQ:KTTA) shares surged 66% to $0.8100. Amber International Holding Limited (NASDAQ:AMBR) shares rose 60% to $2.52 after reporting better-than-expected third-quarter sales and a $50 million buyback. Boqii Holding Limited (NYSE:BQ) shares increased by 47% to $2.59 [9] - Conversely, Lazydays Holdings, Inc. (NASDAQ:GORV) shares dropped 31% to $0.5284, and MingZhu Logistics Holdings Limited (NASDAQ:YGMZ) fell 24% to $0.1415 following an $8 million registered direct offering [9]

Core Insights - Deere & Company reported a net income of $1.065 billion for Q4 2025, down 14% from $1.245 billion in Q4 2024, with earnings per share decreasing from $4.55 to $3.93 [1][2][10] - For the fiscal year 2025, net income was $5.027 billion, a 29% decline from $7.100 billion in fiscal 2024 [1][2][10] - The company anticipates fiscal 2026 net income to range between $4.00 billion and $4.75 billion [4][10] Financial Performance - Worldwide net sales and revenues increased by 11% to $12.394 billion in Q4 2025, but decreased by 12% to $45.684 billion for the full year [2][10] - Net sales for Q4 2025 were $10.579 billion, compared to $9.275 billion in Q4 2024, while full-year net sales were $38.917 billion, down from $44.759 billion [2][10] - Operating profit for Q4 2025 was $1.351 billion, a 7% decrease from $1.450 billion in Q4 2024, with full-year operating profit down 33% to $6.020 billion [2][10] Segment Performance - Production & Precision Agriculture segment saw Q4 net sales of $4.740 billion, up 10% from $4.305 billion in Q4 2024, but operating profit decreased by 8% to $604 million [6][17] - Small Agriculture & Turf segment reported Q4 net sales of $2.457 billion, a 7% increase, but operating profit plummeted 89% to $25 million [7][17] - Construction & Forestry segment experienced a 27% increase in Q4 net sales to $3.382 billion, with operating profit rising 6% to $348 million [8][17] Market Outlook - The company expects 2026 to mark the bottom of the large agriculture cycle, with ongoing margin pressures from tariffs and challenges in the large agriculture sector [5][10] - Forecasts for 2026 indicate a decline of 15% to 20% in large agriculture, while small agriculture and turf are expected to remain flat to up 5% [11][10] - Construction equipment sales in the U.S. and Canada are projected to be flat to up 5% [11][10]

Financial Performance - Total revenue for Q3 FY2026 was $644.5 million, a decrease of 5.2% compared to $679.8 million in Q3 FY2025 [8, 27, 29] - Pre-tax income for Q3 FY2026 was $2.8 million [8, 31] - Diluted earnings per share for Q3 FY2026 were $0.05, a decrease of 28.6% [8, 29] - For the first nine months of FY2026, total revenue was $1.7853 billion, down 8.1% from $1.9422 billion in the same period of FY2025 [32, 34, 36] - The company anticipates a loss of $2 to $4 million in Q4 due to the divestiture of dealership operations in Germany [21] Segment Performance - Agriculture segment revenue is expected to be down 15% to 20% for FY26 [12, 45] - Construction segment revenue is expected to be down 5% to 10% for FY26 [16, 45] - Europe segment revenue is expected to be up 35% to 40% for FY26 [21, 45] - Australia segment revenue is expected to be down 20% to 25% for FY26 [26, 45] Balance Sheet - Equipment inventory decreased by $97 million as of October 31, 2025, compared to January 31, 2025 [39] - Used equipment inventory decreased by $96 million [39] - Rental fleet assets decreased to $71 million as of October 31, 2025, from $76 million as of January 31, 2025 [39]

Group 1 - Alamo Group Inc. (ALG) designs and manufactures high-quality agricultural equipment and provides infrastructure maintenance, with a nearly 10% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Bath & Body Works, Inc. (BBWI) specializes in home fragrance, body care, soaps, and sanitizers, experiencing a 2% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Beazer Homes USA, Inc. (BZH) constructs single and multi-family homes, with a significant 14.7% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]