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💡 Key idea:
Key takeaways
- Deere & Company warns that difficult market conditions, due in part to tariffs, will continue into the coming year.
- The large farm and construction equipment manufacturer gave a full-year outlook below expectations.
- This news offset better-than-expected earnings and sales numbers for the fiscal fourth quarter.
Shares of Deere & Company (DE) fell Wednesday morning after the large farm and construction equipment manufacturer gave a weak outlook and warned that “challenging market conditions” will persist for longer.
In the company’s fourth-quarter fiscal 2025 earnings report, CEO John May said that “ongoing margin pressures from tariffs and ongoing challenges in the large agriculture sector remain.” He added that Deere believes “2026 will represent the bottom of the big agricultural cycle.”
The company expects net income next year to range between $4.00 billion and $4.75 billion. Analysts surveyed by Visible Alpha were looking for $5.19 billion.
Expectations offset a strong fourth quarter. Deere reported earnings per share of $3.93, with revenue rising 11% to $12.39 billion. Both exceeded visual alpha estimates.
The Production and Precision Agriculture division posted a 10% sales gain to $4.74 billion. Sales grew 7% to $2.46 billion in the small agriculture and turf unit, and rose 27% to $3.38 billion in the construction and forestry segment.
However, for fiscal year 2026, Deere expects production and precision agriculture sales to decline 5% to 10%. They expect it to rise by about 10% in both small agriculture, turf, construction and forestry.
Deere shares fell 4% in recent trading. The stock has gained about 13% so far in 2025, slightly lagging the performance of the benchmark S&P 500 Index.
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