Deere & Co. Earnings Drop 50% in Q1 2025

Core Insights - Deere & Co. reported a challenging first quarter for fiscal 2025, with significant declines in earnings and revenue due to unfavorable market conditions and inventory adjustments [2][3][10] Financial Performance - Net income for Q1 2025 was $869 million, or$3.19 per diluted share, down approximately 50% from $1.75 billion or$6.23 per share in Q1 2024 [2][4] - Revenue decreased by 30% to $8.51 billion compared to$12.19 billion in Q1 2024 [2][4] - The operating margin for the Production & Precision Agriculture segment fell to 11.0%, down from 21.6% in the previous year [4] Segment Performance - The Production & Precision Agriculture segment experienced a 37% drop in sales to $3.07 billion, with operating profit plunging 68$338 million [7] - The Small Agriculture & Turf division reported a 28% decrease in sales to $1.75 billion, with operating profits declining by 62$124 million [8] - The Construction & Forestry segment saw a 38% sales decrease to $2 billion, with operating profit declining by 89$65 million [8] - The Financial Services division was an exception, achieving an 11% rise in net income to 230 million [9] Business Overview - Deere operates across four main segments: Production & Precision Agriculture, Small Agriculture & Turf, Construction & Forestry, and Financial Services [5] - The company is focusing on a Smart Industrial Operating Model to enhance operational efficiency and product offerings [5][6] Future Outlook - Management forecasts net income for fiscal year 2025 to range between 5.0 billion and $5.5 billion, indicating resilience despite current challenges [11] - Sales in the Production and Precision Agriculture division are expected to fall by 15% to 20%, while Small Agriculture & Turf and Construction and Forestry sales are projected to decline by 10% to 15% [12]