Deere & Company, a leading manufacturer of agricultural machinery and heavy equipment, reported significant declines in its financial performance for the second quarter of fiscal year 2025. The company recorded net income of $1.804 billion, or $6.64 per diluted share, down 24% from $2.370 billion, or $8.53 per share, in the same quarter the previous year. For the year-to-date period, net income was $2.673 billion, a 35% fall from $4.121 billion a year earlier.

Total worldwide net sales and revenues for the quarter fell by 16% to $12.763 billion, with equipment operations net sales declining by 18% to $11.171 billion. Year-to-date, net sales fell 22% to $21.272 billion. The decline was attributed to lower shipment volumes across key segments, including Production and Precision Agriculture, which saw a 21% drop in net sales to $5.230 billion, and Construction and Forestry, which experienced a 23% decrease in net sales to $2.947 billion.

For the Production and Precision Ag segment, operating profit sank 30% to $1.148 billion, resulting in an operating margin of 22%. In the Small Agriculture and Turf segment, net sales decreased 6% to $2.994 billion, though operating profit increased slightly to $574 million, marking a 1% gain year-over-year. The Construction and Forestry segment suffered an operating profit fall of 43% to $379 million and an operating margin of 12.9%.

Looking ahead, Deere’s guidance for fiscal year 2025 has been adjusted. The company now expects net income to fall within a range of $4.75 billion to $5.50 billion. Importantly, the company anticipates continued impacts from elevated tariffs, projecting a pretax tariff effect of approximately $500 million for the fiscal year. The overall guidance reflects the expected negative effects of ongoing global trade uncertainties, with industry sales projections forecasting a 30% decrease in large ag equipment sales in the U.S. and Canada.

The complete breakdown of segments includes anticipated decreases of 15% to 20% for Production and Precision Ag, 10% to 15% for Small Ag and Turf, and 10% to 15% for Construction and Forestry. Financial services’ net income for the year is expected to be around $750 million. Additionally, Deere foresees operating cash flow from equipment operations between $4.5 billion and $5.5 billion.

Despite these challenges, Joseph Jepsen, Chief Financial Officer, emphasized the company’s disciplined financial management and cost control measures amidst the ongoing market volatility. According to company statements, Deere’s operations have been shaped by external pressures, necessitating prudent planning and execution to safeguard its market position.