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DE posted Q3 EPS of $4.75, beating estimates but declining 24% y/y.
Equipment net sales fell 9% y/y to $10.36B, topping the $10.26B estimate.
Deere narrowed 2025 net income forecast to $4.75-$5.25B from the prior range.
Deere & Company (DE - Free Report) has reported third-quarter fiscal 2025 (ended July 27) earnings of $4.75 per share, which beat the Zacks Consensus Estimate of $4.62. The bottom line, however, decreased 24% from the prior-year quarter on lower shipment volumes.
Net sales of equipment operations (comprising Agriculture, and Turf, Construction and Forestry) were $10.36 billion, down 9% year over year. However, net sales topped the Zacks Consensus Estimate of $10.26 billion. Total net sales (including financial services and others) were $12.02 billion, down 8.6% year over year.
The cost of sales in the reported quarter was down 3.5% year over year to $7.57 billion. Total gross profit decreased 21.2% year over year to $2.79 billion. Selling, administrative and general expenses fell 4.8% to $1.22 billion from the prior-year period.
Total operating profit (including financial services) slumped 31.7% year over year to $1.57 billion in the fiscal third quarter.
DE’s Segmental Performances in Q3
The Production & Precision Agriculture segment’s sales fell 16% year over year to $4.27 billion due to lower shipment volumes and unfavorable price realization. The figure missed our model’s estimated revenues of $4.30 billion for the quarter. Operating profit decreased 50% year over year to $580 million, attributed to lower shipment volumes/sales mix. Our estimate for the segment’s operating profit was $583 billion.
Small Agriculture & Turf sales fell 1% to $3.03 billion from the year-earlier quarter but were higher than our projected sales of $2.68 billion. Segmental sales were impacted by lower shipment volume, which was partially offset by currency translation and favorable price realization. Operating profit fell 2% year over year to $485 million due to lower shipment volumes and higher warranty expenses, partially offset by price realization. The figure beat our estimate of operating profit of $359 million for the segment.
Construction & Forestry sales were $3.06 million, down 5% year over year, reflecting unfavorable price realization. Our estimate for the segment’s revenues was $3.21 billion. Operating profit decreased 47% year over year to $237 million on unfavorable price realization and higher production costs due to higher tariffs, partially negated by a favorable product mix. Our estimate for the segment’s operating profit was $360 million.
Revenues in Deere’s Financial Services division were $1.42 billion in the reported quarter, down 4% year over year. Our estimate for the segment’s revenues was $1.56 billion. Net income of Deere’s Financial Services division was $205 million in the reported quarter compared with $153 million in the prior-year quarter. The upside was due to lower provision for credit losses.
Deere’s Cash & Debt Position
DE reported cash and cash equivalents of $8.58 billion for the third quarter of fiscal 2025 compared with $7.32 billion at the end of fiscal 2024. The cash flow from operating activities was $3.46 billion in the first nine months of fiscal 2025 compared with $4.14 billion in the prior-year period.
At the end of the quarter, the long-term borrowing was $44.43 billion compared with $43.23 billion at the year-ago quarter’s end.
DE’s 2025 Guidance
Deere expects net income for fiscal 2025 between $4.75 billion and $5.25 billion, narrowed from the prior stated $4.75-$5.50 billion.
Net sales for Production & Precision Agriculture are expected to decrease 15-20% year over year in fiscal 2025.
Sales of Small Agriculture & Turf are expected to decline 10%. Sales of Construction & Forestry are projected to fall 10-15%. The Financial Services segment’s net income is expected to be $770 million.
Deere Stock Price Performance
DE shares have gained 39.5% in the past year compared with the industry’s growth of 37.4%.
Let us take a look at how other farm equipment stocks fared in their earnings releases.
AGCO Corp. (AGCO - Free Report) delivered an adjusted EPS of $1.35 in the second quarter of 2025 compared with the prior-year quarter’s $2.53. The reported figure topped the Zacks Consensus Estimate of $1.06.
AGCO’s net sales decreased 18.8% year over year to $2.36 billion in the June-end quarter. The top line beat the Zacks Consensus Estimate of $2.48 billion.
CNH Industrial N.V. (CNH - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of 17 cents, which declined from 38 cents in the prior-year quarter. The figure, however, surpassed the Zacks Consensus Estimate of 16 cents.
In the second quarter, CNH’s net sales declined nearly 14% from the year-ago level to $4.71 billion but topped the Zacks Consensus Estimate of $4.53 billion. The company’s net sales from industrial activities came in at $4.02 billion, down 16% due to lower industry demand.
Lindsay Corporation (LNN - Free Report) delivered adjusted EPS of $1.78 in the third quarter of fiscal 2025 (ended on May 31, 2025), beating the Zacks Consensus Estimate of $1.36. The company reported earnings of $1.85 in the year-ago quarter. Including an income tax credit of 44 cents per share, EPS in the third quarter of fiscal 2024 were $1.41.
Lindsay generated sales of $169.5 million, up 22% from the $139 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $162 million.
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Deere Q3 Earnings & Sales Beat Estimates, Dip Y/Y on Lower Volume
Key Takeaways
Deere & Company (DE - Free Report) has reported third-quarter fiscal 2025 (ended July 27) earnings of $4.75 per share, which beat the Zacks Consensus Estimate of $4.62. The bottom line, however, decreased 24% from the prior-year quarter on lower shipment volumes.
Net sales of equipment operations (comprising Agriculture, and Turf, Construction and Forestry) were $10.36 billion, down 9% year over year. However, net sales topped the Zacks Consensus Estimate of $10.26 billion. Total net sales (including financial services and others) were $12.02 billion, down 8.6% year over year.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company price-consensus-eps-surprise-chart | Deere & Company Quote
Deere’s Profits Decline in Q3
The cost of sales in the reported quarter was down 3.5% year over year to $7.57 billion. Total gross profit decreased 21.2% year over year to $2.79 billion. Selling, administrative and general expenses fell 4.8% to $1.22 billion from the prior-year period.
Total operating profit (including financial services) slumped 31.7% year over year to $1.57 billion in the fiscal third quarter.
DE’s Segmental Performances in Q3
The Production & Precision Agriculture segment’s sales fell 16% year over year to $4.27 billion due to lower shipment volumes and unfavorable price realization. The figure missed our model’s estimated revenues of $4.30 billion for the quarter. Operating profit decreased 50% year over year to $580 million, attributed to lower shipment volumes/sales mix. Our estimate for the segment’s operating profit was $583 billion.
Small Agriculture & Turf sales fell 1% to $3.03 billion from the year-earlier quarter but were higher than our projected sales of $2.68 billion. Segmental sales were impacted by lower shipment volume, which was partially offset by currency translation and favorable price realization. Operating profit fell 2% year over year to $485 million due to lower shipment volumes and higher warranty expenses, partially offset by price realization. The figure beat our estimate of operating profit of $359 million for the segment.
Construction & Forestry sales were $3.06 million, down 5% year over year, reflecting unfavorable price realization. Our estimate for the segment’s revenues was $3.21 billion. Operating profit decreased 47% year over year to $237 million on unfavorable price realization and higher production costs due to higher tariffs, partially negated by a favorable product mix. Our estimate for the segment’s operating profit was $360 million.
Revenues in Deere’s Financial Services division were $1.42 billion in the reported quarter, down 4% year over year. Our estimate for the segment’s revenues was $1.56 billion. Net income of Deere’s Financial Services division was $205 million in the reported quarter compared with $153 million in the prior-year quarter. The upside was due to lower provision for credit losses.
Deere’s Cash & Debt Position
DE reported cash and cash equivalents of $8.58 billion for the third quarter of fiscal 2025 compared with $7.32 billion at the end of fiscal 2024. The cash flow from operating activities was $3.46 billion in the first nine months of fiscal 2025 compared with $4.14 billion in the prior-year period.
At the end of the quarter, the long-term borrowing was $44.43 billion compared with $43.23 billion at the year-ago quarter’s end.
DE’s 2025 Guidance
Deere expects net income for fiscal 2025 between $4.75 billion and $5.25 billion, narrowed from the prior stated $4.75-$5.50 billion.
Net sales for Production & Precision Agriculture are expected to decrease 15-20% year over year in fiscal 2025.
Sales of Small Agriculture & Turf are expected to decline 10%. Sales of Construction & Forestry are projected to fall 10-15%. The Financial Services segment’s net income is expected to be $770 million.
Deere Stock Price Performance
DE shares have gained 39.5% in the past year compared with the industry’s growth of 37.4%.
Image Source: Zacks Investment Research
DE’s Zacks Rank
Deere currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Farm Equipment Stocks
Let us take a look at how other farm equipment stocks fared in their earnings releases.
AGCO Corp. (AGCO - Free Report) delivered an adjusted EPS of $1.35 in the second quarter of 2025 compared with the prior-year quarter’s $2.53. The reported figure topped the Zacks Consensus Estimate of $1.06.
AGCO’s net sales decreased 18.8% year over year to $2.36 billion in the June-end quarter. The top line beat the Zacks Consensus Estimate of $2.48 billion.
CNH Industrial N.V. (CNH - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of 17 cents, which declined from 38 cents in the prior-year quarter. The figure, however, surpassed the Zacks Consensus Estimate of 16 cents.
In the second quarter, CNH’s net sales declined nearly 14% from the year-ago level to $4.71 billion but topped the Zacks Consensus Estimate of $4.53 billion. The company’s net sales from industrial activities came in at $4.02 billion, down 16% due to lower industry demand.
Lindsay Corporation (LNN - Free Report) delivered adjusted EPS of $1.78 in the third quarter of fiscal 2025 (ended on May 31, 2025), beating the Zacks Consensus Estimate of $1.36. The company reported earnings of $1.85 in the year-ago quarter. Including an income tax credit of 44 cents per share, EPS in the third quarter of fiscal 2024 were $1.41.
Lindsay generated sales of $169.5 million, up 22% from the $139 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $162 million.