Deere 2025 Q3 Earnings Declines in Net Income Despite EPS Beat

Deere reported its Q3 2025 earnings on August 14, revealing a revenue drop and a significant decline in net income, though the company beat EPS estimates. The earnings call included updated fiscal 2025 guidance and highlighted cost discipline amid challenging market conditions.

Revenue
Deere's total revenue for Q3 2025 fell by 8.3% year-over-year to $11.78 billion. Net sales, the company’s core operating segment, totaled $10.36 billion, while finance and interest income amounted to $1.43 billion. Other income added $235 million to the total. These figures reflect a broad decline across key revenue streams, with net sales representing the largest contributor to overall earnings.

Earnings/Net Income
Deere's earnings per share (EPS) decreased by 24.7% to $4.76 in Q3 2025, down from $6.32 in the same period the previous year. The company's net income also declined sharply, falling by 26.6% to $1.27 billion from $1.73 billion in 2024 Q3. While the company exceeded EPS expectations by 3%, the overall earnings performance remains a cause for concern given the significant drop in net income.

Price Action
Deere’s stock has seen a steady decline in recent sessions, falling 1.27% in the latest trading day, 5.49% over the past full week, and 4.89% month-to-date. The stock experienced a 7.95% drop following the earnings release, though it offers a 1.26% dividend yield with a long history of consistent payouts.

Post Earnings Price Action Review
Historically, Deere's stock has shown mixed short-term performance after earnings reports, with a 50% chance of a negative return within one day and a median decline of -3.1%. However, holding the stock for five days has shown potential for gains, with a median positive return of 5.2%. Extending the holding period to 30 days increased the likelihood of positive returns, despite the company’s recent earnings miss and subsequent price drop. Investors should consider their risk tolerance and investment horizon when evaluating whether to hold Deere shares post-earnings.

CEO Commentary
CEO Ulf Skifte emphasized Deere's disciplined approach to production, inventory, and cost management in response to challenging market dynamics. Reduced field inventory levels across key regions position the company to better respond to market shifts. CFO Josh Beal highlighted the focus on execution amid customer caution due to trade uncertainty and interest rates. Skifte pointed to progress in the used equipment market, including initiatives like pool funds and financial tools that support dealers and customers. He expressed cautious optimism regarding improved order activity in Europe and South America, as well as tax-driven demand in North America. The leadership remains focused on structural cost reductions, operational efficiency, and technology adoption to drive long-term value.

Guidance
Deere has updated its fiscal 2025 guidance, narrowing net income to a range of $4.75–$5.25 billion, with an effective tax rate of 19–21% and equipment operating cash flow of $4.5–$5.5 billion. Ag and turf sales are expected to decline 15–20%, while small ag and turf sales are projected to fall about 10%. Construction and forestry sales are guided to decrease 10–15%, with operating margins of 8.5–10%. Tariff costs for 2025 are now estimated at $600 million pretax. The company expects to produce in line with retail demand in 2026, with model year 2026 sprayer orders projected down 20% year-over-year.

Additional News
In the three weeks following Deere's earnings release, the company remained focused on its long-term strategic goals without announcing any major mergers or acquisitions. No C-level executive changes were reported during this period. Deere continued to offer a 1.26% dividend yield, maintaining its record of 55 consecutive years of dividend payments. The company has not announced new share buyback programs, but the consistent dividend remains a key draw for income-focused investors. Deere's leadership emphasized continued investment in operational efficiency and technology, underscoring its commitment to long-term value creation for shareholders.