Core Insights - The industrial sector in 2025 is influenced by cyclical recovery, policy stimulus, trade-driven structural shifts, and volatile PMI movements, with early-year optimism fading mid-summer before rebounding in August [1] - The S&P 500 Industrials Select Sector SPDR (XLI) achieved a year-to-date return of 16.1% as of July, with a 12-month performance of 20.6%, despite experiencing volatility in Manufacturing PMI readings [2] - Geopolitical factors and tariffs have impacted input prices and inflation, prompting firms to reshore production and diversify suppliers, which has bolstered industrial demand [3] Manufacturing PMI and Sector Performance - The S&P Global PMI rose to 50.1 in January, indicating expansion, but fell to 49.8 by July, reflecting contraction due to cooling demand and tariff-related stress, before rebounding to 53.3 in August [2] - The rebound in August was driven by increases in new orders, inventories, and hiring, alongside easing supply-chain pressures [2] Macro and Geopolitical Influences - Ongoing tariffs have raised input prices and inflation, leading to increased industrial activity as firms adapt to these pressures [3] - Policy support through infrastructure spending and incentives for on-shoring has positively influenced investor sentiment and industrial earnings outlooks [3] Investment Opportunities - Companies such as Kaiser Aluminum Corporation (KALU) are projected to have an earnings growth rate of 84.9% for the current year, with a Zacks Consensus Estimate improvement of 11.3% over the past 60 days [5] - AGCO Corporation (AGCO) is expected to see a 36.7% earnings growth rate next year, with estimates up 13.8% recently [6] - Hudson Technologies, Inc. (HDSN) anticipates a 19.2% earnings growth rate for the next year, with a significant estimate increase of 27% over the past 60 days [7] Conclusion - The U.S. industrial sector presents an attractive investment landscape for 2025, supported by policy initiatives and structural shifts in trade and manufacturing, despite the challenges posed by tariffs and geopolitical tensions [8][9]

Core Viewpoint - Deere & Company has lowered its full-year guidance due to tariff uncertainty, cautious customer spending, and weaker crop prices, leading to a significant drop in stock price [3][5][9] Financial Performance - Third-quarter revenue increased to $15.2 billion, surpassing the $14.8 billion consensus, while earnings per share (EPS) reached $10.02 compared to the expected $9.57 [4] - The stock price is currently at $480.02, down 6.53% [3] Guidance and Market Reaction - The company forecasts weakness across all business units and regions, attributing this to tariffs and reduced equipment demand [5][6] - Deere expects reciprocal tariffs and higher steel costs to decrease pretax results by approximately $700 million, with about half of this impact occurring in the current quarter [5][6] Inventory and Demand - Deere has reduced large tractor inventories by 45%, small tractors by 30%, and earthmoving units by 25%-30% due to slower equipment demand [6] - Customers are increasingly opting for used equipment, which is creating headwinds for new equipment sales [6] Crop Prices Impact - Declining crop prices, particularly for corn, wheat, and soybeans, are at multi-year lows, leading farmers to defer purchases of new equipment [7] Analyst Ratings and Stock Forecast - The 12-month stock price forecast for Deere is $523.93, indicating a potential upside of 9.34% based on 20 analyst ratings [7] - The stock is currently rated as a Moderate Buy, although it is not included in the list of top recommended stocks by leading analysts [14] Valuation and Technical Outlook - Deere's stock trades at around 23x earnings and 26x forward earnings, which is a premium to its historical average but not overvalued relative to the broader sector [11] - The stock has fallen below its 50-day simple moving average, suggesting potential further declines in the short term [11][13]

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]

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]

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 - Net sales decreased to $39245 thousand in Q2 2025 from $54793 thousand in Q2 2024 [23] - Adjusted Gross Profit decreased to $7531 thousand in Q2 2025 from $13349 thousand in Q2 2024 [23] - Adjusted Gross Profit Margin decreased to 192% of net sales in Q2 2025 from 244% in Q2 2024 [23] - Adjusted SG&A increased to 250% of net sales in Q2 2025 from 212% in Q2 2024, while the actual expense decreased to $9803 thousand from $11624 thousand [23] - Adjusted EBITDA decreased to $(2272) thousand in Q2 2025 from $1725 thousand in Q2 2024 [23] Strategic Initiatives and Restructuring - A new restructuring plan was initiated to optimize the product portfolio, distribution center, and manufacturing footprint [13, 16] - The company anticipates over $3 million in estimated annual cost savings from the restructuring plan, along with improvements in working capital [16] - The company is focused on higher-margin proprietary brands by eliminating underperforming brands [16] - The company expects improved Adjusted Gross Profit Margin and reduced year-over-year Adjusted SG&A expense for full year 2025 [20] Liquidity and Debt - Cash balance as of June 30, 2025, was $110 million [30] - Liquidity, defined as cash plus available borrowing capacity, was $200 million as of June 30, 2025 [30] - Free Cash Flow for the three months ended June 30, 2025, was $14 million [30] - Total debt outstanding as of June 30, 2025, was $1226 million, with net debt at $1116 million [30]

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 2025 were down 14% year-over-year at $4.7 billion, with adjusted EBIT down 55% to $224 million and EPS at 17% [12][13] - Adjusted net income decreased by about half, with adjusted diluted earnings per share down from $0.35 to $0.17 [16][17] - Second quarter gross margin was 21.8%, down from 24.4% in Q2 2024, affected by lower production volumes and unfavorable geographic mix [18] Business Line Data and Key Metrics Changes - Agriculture segment sales were down 17% to $3.2 billion, with North America down 36%, representing over 90% of the total decline in ag sales [12][17] - Construction segment net sales were $773 million, down 13% year-over-year, with gross margin at 15.7%, down from 16.5% in Q2 2024 [21] - Financial Services reported net income of $87 million, with a year-over-year decrease mainly driven by higher risk costs in Brazil [22] Market Data and Key Metrics Changes - Industrial production hours were down 12% year-over-year, with agriculture down 12% and construction down 15% [7] - North American industry retail demand was down 37% for high horsepower tractors and down 23% for combines [13] - The global industry forecast for agriculture is expected to be down around 10% from 2024, with 2025 representing a trough level of global market demand [31] Company Strategy and Development Direction - The company is focused on reducing channel inventories while defending market share, with a target to align production with retail demand by the end of 2025 [5][8] - Five key strategic pillars were outlined: expanding product leadership, advancing Iron and Tech integration, driving commercial excellence, operational excellence, and quality as a mindset [13] - A new collaboration with Starlink was announced to provide connectivity for farmers, enhancing productivity [10][14] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions remained soft, with ongoing complexity and uncertainty in the macroeconomic environment [5][6] - The company expects to produce in line with retail demand in the second half of 2025 and into 2026, while maintaining a disciplined approach to capital allocation [12][35] - Management expressed confidence in achieving targeted dealer inventory levels and emphasized the importance of operational excellence and cost-saving initiatives [8][38] Other Important Information - The company reaffirmed its capital allocation priorities, including reinvesting in the business while maintaining a healthy balance sheet [22][23] - The foreign exchange impact on net sales is now forecasted to be minus 1%, an improvement from the previous assumption of minus 3% [24] - Tariff impacts are expected to grow through the second half of the year, with a significant negative effect on EBIT anticipated [105] Q&A Session Summary Question: Inventory levels in Agriculture - Management confirmed a reduction of $200 million in excess inventory, with ongoing efforts to align inventory levels with retail demand [40][41] Question: 2026 order trends - Management indicated that 2025 is expected to be a trough year, with uncertainty around tariffs impacting future demand [46][48] Question: Pricing strategies - Management stated that pricing will be positive for the full year, driven by higher value functionality and cost discipline [58][60] Question: North American market challenges - Management acknowledged the price differential between new and used equipment and emphasized efforts to align inventory levels [96][100] Question: Tariff impacts timing - Management expects most tariff impacts to be felt in Q4 2025, with ongoing efforts to mitigate these costs [104][106]

Financial Performance - Net sales for Q2 2025 were $2635 million, a decrease of 18.8% compared to Q2 2024[7] - Year-to-date net sales in 2025 reached $4685.5 million, a decrease of 24.1% compared to the same period in 2024[7] - Reported operating income for Q2 2025 was $164 million, a significant increase of 167.9% compared to Q2 2024[7] - Adjusted operating income for Q2 2025 was $217.5 million, a decrease of 34.8% compared to Q2 2024[7] - Free cash flow generated through June YTD 2025 was $63 million[35] Market Overview and Production - North America's industry tractor sales decreased by 13% year-to-date in June 2025 compared to 2024[9] - Brazil's industry tractor sales decreased by 12% year-to-date in June 2025 compared to 2024[9] - Western Europe's industry tractor sales decreased by 8% year-to-date in June 2025 compared to 2024[9] - Q2 2025 production was down approximately 16% compared to 2024[14] - Projected full-year 2025 production is expected to be down 15% - 20% compared to 2024[15]

Core Points - Deere & Company will hold its third quarter 2025 earnings call on August 14, 2025, at 9:00 a.m. central time to discuss financial and operating performance [1] - The earnings call will be accessible via the company's website, and a recorded version will be available afterward [2] - Deere & Company is a leader in providing advanced products, technology, and services for agriculture and construction sectors, addressing the global demand for food, fuel, shelter, and infrastructure [3]

Core Viewpoint - Constellium (CSTM) reported quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.28 per share, and showing a decline from $0.52 per share a year ago, indicating a -10.71% earnings surprise [1] Financial Performance - The company posted revenues of $2.1 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.40%, and showing an increase from $1.93 billion year-over-year [2] - Over the last four quarters, Constellium has surpassed consensus revenue estimates three times [2] Stock Performance - Constellium shares have increased approximately 35.6% since the beginning of the year, outperforming the S&P 500's gain of 8.6% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $2.05 billion, and for the current fiscal year, it is $1.07 on revenues of $8.04 billion [7] - The estimate revisions trend for Constellium was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Metal Products - Distribution industry, to which Constellium belongs, is currently in the bottom 24% of over 250 Zacks industries, suggesting potential challenges ahead [8]