Deere & Company (DE – Free Report) has reported first-quarter fiscal 2025 (ended Jan. 26, 2025) earnings of $3.19 per share, beating the Zacks Consensus Estimate of $3.13. However, the bottom line fell 49% from the prior-year quarter on lower shipment volumes.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net sales of equipment operations (comprising Agriculture and Turf, Construction, and Forestry) were $6.81 billion, down 35.1% from the prior-year quarter. Revenues missed the Zacks Consensus Estimate of $7.70 billion. Total net sales (including financial services and others) were $8.51 billion, down 30% from the year-earlier quarter.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company price-consensus-eps-surprise-chart | Deere & Company Quote
Deere’s Profits Decline in Q1
The cost of sales in the reported quarter was down 30% from the prior-year quarter to $5.04 billion. Total gross profit in the reported quarter fell 46.1% from the prior-year quarter to $1.77 billion. Selling, administrative and general expenses (SA&G) fell 8.8% to $972 million from the prior-year period.
Total operating profit (including financial services) fell 64% from the prior-year quarter to $793 million in the fiscal first quarter.
DE’s Segmental Performances in Q1
The Production & Precision Agriculture segment’s sales fell 37% from the prior-year quarter to $3.1 billion due to lower shipment volumes. The figure was lower than our model’s estimated revenues of $3.6 billion for the quarter. The operating profit in the segment declined 68% from the prior-year quarter to $338 million. Gains from lower SA&G, research and development (R&D), and production costs were offset by decreased shipment volumes and sales mix. Our estimate for the segment’s operating profit was $422 million.
Small Agriculture & Turf sales were down 28% year over year at $1.75 billion on low volumes. Our projection for the segment’s sales was $1.90 billion. Operating profit declined 62% year over year to $124 million. The figure lagged our estimate of operating profit of $174 million for the segment.
Construction & Forestry sales were $1.99 billion, down 38% year over year. The figure missed our projection of $2.35 billion. Operating profit decreased 89% year over year to $65 million. Our estimate for the segment’s operating profit was $234 million. Gains from lower SA&G, R&D, and production costs were offset by decreased shipment volumes and sales mix.
Revenues in Deere’s Financial Services division were $1.45 million in the reported quarter, up 1.5% year over year. The figure lagged our estimate of $1.59 billion. The segment’s operating income was $266 million in the quarter under review, up from $257 million in the prior-year comparable quarter. Our projection was $230 million for the quarter.
Net income for Financial Services improved 11% year over year to $230 million in the first quarter of fiscal 2025.
Deere’s Q1 Cash & Debt Position
DE reported cash and cash equivalents of $6.6 billion at the end of the first quarter of fiscal 2025 compared with $7.3 billion at the end of fiscal 2024. Cash used in operating activities was $1.13 billion in the first quarter of fiscal 2025 compared with an outflow of $0.91 billion in the prior-year quarter. At the end of the fiscal first quarter, the long-term debt was $43.4 billion, up from $43.2 billion at the end of fiscal 2024.
DE’s 2025 Guidance
Deere expects net income for fiscal 2025 between $5 billion and $5.5 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 be down 10-15%. The Financial Services segment’s net income is expected to be $750 million.
Deere’s Share Price Performance
The company’s shares have gained 25.7% in the past year compared with the industry’s 21.6% growth.
Image Source: Zacks Investment Research
DE Stock’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 adjusted earnings per share (EPS) of $1.97 in fourth-quarter 2024 compared with the prior-year quarter’s $3.78. However, the reported figure beat the Zacks Consensus Estimate for EPS of $1.80.
Net sales decreased 24% year over year to $2.89 billion in the December-end quarter. The top line missed the Zacks Consensus Estimate of $3.16 billion. Excluding the unfavorable currency-translation impacts of 1.8%, net sales fell 22.2% year over year.
CNH Industrial (CNH – Free Report) reported a fourth-quarter 2024 adjusted EPS of 15 cents, which declined from 42 cents in the prior-year quarter. The figure also missed the Zacks Consensus Estimate for EPS of 19 cents.
In the fourth quarter, consolidated sales declined nearly 28% from the year-ago level to $4.88 billion and missed the consensus mark of $4.89 billion. CNH’s net sales from industrial activities came in at $4.13 billion, down 31% due to lower shipment volumes.
Lindsay Corporation (LNN – Free Report) delivered EPS of $1.57 in first-quarter fiscal 2025 (ended Nov. 30, 2024), beating the Zacks Consensus Estimate of $1.34. The bottom line improved 15% year over year.
LNN generated sales of $166 million, up from $161 million in the year-ago quarter. The top line met the Zacks Consensus Estimate.
Financial Market Newsflash
No financial news published today. Check back later.
