John Deere(DE)2025-05-29 15:45Financial Performance - Net sales and revenues for the second quarter of 2025 decreased by 16% to $12,763 million compared to $15,235 million in 2024, and year-to-date sales decreased by 22% to $21,272 million from $27,420 million[107]. - Net income attributable to Deere & Company for the second quarter of 2025 was $1,804 million, a decrease of 24% from $2,370 million in 2024, and year-to-date net income decreased by 35% to $2,673 million from $4,121 million[107]. - Total consolidated net income attributable to Deere & Company for the six months ended April 27, 2025, was $2,673 million, down from $4,121 million in the same period of 2024, representing a decrease of about 35%[156]. - Net income for the first six months of 2025 was $2,667 million, a decrease of 35.1% compared to $4,116 million in 2024[161]. Segment Performance - Production and Precision Agriculture segment net sales decreased by 21% to $5,230 million in the second quarter of 2025, with operating profit down 30% to $1,148 million[111]. - Small Agriculture and Turf segment net sales decreased by 6% to $2,994 million in the second quarter of 2025, with operating profit slightly up by 1% to $574 million[116]. - Construction and Forestry net sales decreased by 23% to $2,947 million for the three months ended April 27, 2025, and by 30% to $4,941 million for the six months ended April 27, 2025, compared to the same periods in 2024[121]. - Operating profit for Construction and Forestry dropped 43% to $379 million for the three months ended April 27, 2025, and 64% to $444 million for the six months ended April 27, 2025, primarily due to lower shipment volumes and unfavorable price realization[121]. Cost and Expenses - The cost of sales to net sales ratio increased to 68.1% in the second quarter of 2025 from 67.3% in 2024, primarily due to higher overhead costs and tariffs[108]. - The cost of sales for equipment operations was $7,609 million in Q2 2025, compared to $9,157 million in Q2 2024, reflecting a reduction of approximately 17%[154]. - Total costs and expenses for the six months ended April 27, 2025, were $18,040 million, down from $22,087 million in the same period of 2024, a decrease of about 18%[156]. Cash Flow and Financing - Cash provided by operating activities was $568 million for the first six months of 2025, down from $944 million in the same period last year[135]. - The company forecasts lower operating cash flows from equipment operations in 2025 compared to 2024, driven by a decrease in net income adjusted for non-cash provisions[129]. - Cash flows from operating activities decreased to $568 million in 2025 from $944 million in 2024, reflecting a decline of 39.8%[161]. - Net cash used for investing activities was $779 million in 2025, compared to a cash outflow of $1,670 million in 2024, indicating a significant improvement[161]. - Net cash provided by financing activities was $(821) million in 2025, a decrease from $(1,162) million in 2024, showing a reduction in cash outflow[161]. Market Outlook - The company expects agriculture and turf equipment sales volumes for the remainder of 2025 to be lower than the prior year due to reduced demand driven by high interest rates and market uncertainty[93]. - The construction equipment industry sales are forecasted to decline in the U.S. and Canada from 2024 levels, influenced by macroeconomic uncertainty and high mortgage rates[105]. - The company anticipates continued challenges in the agricultural market due to lower sales volumes, higher sales incentives, and elevated receivable write-offs in 2025[99]. - The company continues to face challenges from higher interest rates, supply chain disruptions, and geopolitical instability affecting its operations and market demand[149]. Research and Development - Research and development expenses for the first six months of 2025 were $1,075 million, a decrease of 2% from $1,098 million in 2024, reflecting continued investment in technology solutions[108]. - Research and development expenses for equipment operations were $549 million in Q2 2025, slightly down from $565 million in Q2 2024[154]. Balance Sheet - Total assets for Deere & Company reached $106.303 billion as of April 2025, compared to $107.320 billion in October 2024, reflecting a decrease of approximately 0.94%[159]. - Total liabilities decreased to $81.925 billion in April 2025 from $84.395 billion in October 2024, a reduction of approximately 2.8%[159]. - Stockholders' equity rose to $24.287 billion in April 2025, up from $22.836 billion in October 2024, indicating an increase of about 6.3%[159]. - The ratio of interest-bearing debt to stockholder's equity was 8.7 to 1 as of April 27, 2025, compared to 8.1 to 1 a year earlier[131]. - The company has access to $11.9 billion in worldwide lines of credit, with $4,866 million unused as of April 27, 2025[143]. Inventory and Borrowings - Inventories increased by $777 million during the first six months of 2025, primarily due to seasonal increases, but decreased by $573 million compared to a year ago[138]. - Inventories stood at $7.870 billion in April 2025, compared to $7.093 billion in October 2024, marking an increase of about 10.9%[159]. - The company's short-term borrowings decreased to $911 million in April 2025 from $1.055 billion in October 2024, a decline of about 13.6%[159]. Stockholder Returns - The company repurchased common stock amounting to $838 million in 2025, down from $2,422 million in 2024, indicating a reduction of 65.4%[161]. - Dividends paid increased to $1,827 million in 2025 from $1,888 million in 2024, a decrease of 3.2%[161].