Deere 2025 Q4 Earnings Net Income Falls 14.7% Amid Tariff Pressures

Deere (DE) reported fiscal 2025 Q4 earnings on Nov 26, 2025, with results mixed against expectations. While revenue exceeded forecasts by 11.7% to $12.09 billion, net income declined 14.7% to $1.06 billion, below 2024 levels. The company cut its 2026 guidance to $4–$4.75 billion in net income, citing sub-drought agricultural conditions and $1.2 billion in tariff costs.

Revenue

Deere’s total revenue rose 11.7% to $12.09 billion in Q4 2025, driven by higher shipments and pricing. Net sales formed the largest portion at $10.58 billion, while finance and interest income contributed $1.51 billion, and other revenue added $300 million.

Earnings/Net Income

Net income fell to $1.06 billion in Q4 2025, a 14.7% drop from $1.24 billion in the prior-year period. Earnings per share (EPS) declined 13.8% to $3.94, reflecting elevated costs linked to tariffs and supply chain challenges. Despite higher revenues, the EPS decline signals margin pressures impacting profitability.

Post-Earnings Price Action Review

A strategy of buying DE shares when revenues beat expectations and holding for 30 days generated a 90.22% return, outperforming the benchmark’s 83.07% by 7.14%. The approach demonstrated robust risk management, with a 0.00% maximum drawdown and a Sharpe ratio of 0.59, preserving gains amid market volatility.

CEO Commentary

CEO John May highlighted Deere’s resilience in 2025, noting $5 billion in net income and 12.6% equipment operating margins. He emphasized progress in Precision Ag and autonomy, stating, “We’re excited to unlock value for customers and stakeholders.”

Guidance

For fiscal 2026, Deere projects net income of $4–$4.75 billion and EPS of $16 at midpoint. Production & Precision Ag sales are expected to decline 5–10%, while Small Ag & Turf and Construction & Forestry segments are forecast to grow 10% each. Operating margins for large ag equipment are projected at 11–13%, pressured by tariffs.

Additional News

1. M&A Activity: Deere acquired Sentera, a remote imagery solutions provider, in May 2025 to enhance its precision agriculture offerings. The integration aims to bolster data-driven farming tools via Operations Center™.

2. Strategic Focus: The company announced its next Investor Day on Dec 8, 2025, at the NYSE, to detail long-term tech investments and growth initiatives.

3. Tariff Mitigation: Deere reiterated its commitment to inventory management and cost control to offset ongoing tariff impacts, with a projected $1.2 billion in pretax tariff expenses for 2026.

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