Deere 2025 Q2 Earnings Net Income Falls 23.9% Amid Revenue Decline

Deere (DE), ranking 92nd by market capitalization, reported its fiscal 2025 Q2 earnings on May 29th, 2025. Deere reported a 16.5% decline in revenue, falling to $12.53 billion from $15 billion in the prior year. This missed analysts’ expectations, reflecting challenging market conditions. The company maintained its full-year net income guidance between $5.0 billion and $5.5 billion, which aligns with previous projections, indicating no upward revision despite the quarter’s challenges.

Revenue
Deere's 2025 Q2 revenue reflected a decrease, with net sales reaching $11.17 billion. The finance and interest income segment contributed $1.35 billion, while other income added $238 million, bringing the total to $12.76 billion.

Earnings/Net Income
Deere's EPS fell by 22.3% to $6.65 in Q2 2025 from $8.56 in the same quarter of 2024. The company's net income decreased to $1.80 billion, a 23.9% drop from the previous year's $2.37 billion, indicating weak financial performance.

Price Action
The stock price of Deere has edged down 1.38% during the latest trading day, has edged down 2.18% during the most recent full trading week, and has jumped 9.40% month-to-date.

Post Earnings Price Action Review
The strategy of buying DE when revenue beats and holding for 30 days delivered strong results, with a 244.00% return, vastly outperforming the benchmark's 83.88% return. Despite this significant gain, the strategy's Sharpe ratio was relatively modest at 0.94, indicating moderate risk-adjusted returns. A maximum drawdown of -33.76% underscores the need for risk management amid significant volatility. With a compound annual growth rate (CAGR) of 28.23%, the strategy exhibited substantial growth potential, though it was accompanied by considerable fluctuations. Investors should carefully evaluate their risk tolerance and investment horizon, as the strategy's risk-return profile suggests both promising growth and notable volatility.

CEO Commentary
Joshua Jepsen, Chief Financial Officer, emphasized that despite significant challenges, Deere maintained a disciplined approach to inventory and cost management, resulting in an 18.8% margin for equipment operations. He noted that the company executed plans to reduce field inventories effectively, positioning itself well for the remainder of the year. Jepsen highlighted positive farmer sentiment due to improved commodity prices and government support, but acknowledged ongoing macro uncertainties impacting equipment demand. He expressed optimism about Deere's ability to navigate the current environment while continuing to invest in critical technologies and solutions to enhance customer outcomes.

Guidance
Deere maintains its full-year 2025 net income guidance between $5.0 billion and $5.5 billion. For Q2, the company reported revenue of $12.525 billion and EPS of $6.65. The outlook includes expectations for a revenue decline of approximately 16% year-over-year, with continued focus on cost management and operational efficiency. The guidance reflects anticipated headwinds from tariffs and macroeconomic factors while projecting a gradual recovery in demand as conditions stabilize.

Additional News
On May 28, 2025, Deere announced a quarterly dividend of $1.62 per share, payable on August 8, 2025, to stockholders of record on June 30, 2025. In a significant investment move, John Deere plans to invest $20 billion in the United States over the next decade, focusing on expanding existing facilities and building new ones. This investment is projected to generate a $25 billion economic impact. Additionally, Deere has been adjusting its internal policies, including changes to its Diversity, Equity, and Inclusion initiatives, to focus more on strengthening its domestic workforce and manufacturing footprint.