Deere posted fiscal first-quarter results that topped expectations early Thursday. But its forecast of double-digit declines in agricultural equipment sales "does not reflect the impacts of potential import tariffs by the U.S. and retaliatory actions," the company said. Deere stock slid 4% in early Thursday stock market action.
Deere's earnings call began at 10 a.m. ET. On the Q4 call on Nov. 21, CEO John May noted that "greater than 75% of all products that we sell in the U.S. are assembled here in the U.S."
The company said uncertainty in the market, "particularly in North America," have been weighing on sales.
Deere Earnings
Results: Earnings per share slid nearly 50% to $3.19, but topped $3.11 estimates. Revenue sank 30% to $8.51 billion, topping views of $7.89 billion.
Outlook: Deere has been "underproducing," bringing down dealer inventories to normal levels. That will remove one headwind to sales. Yet the company still provided an outlook for sales of production and precision ag equipment to fall 15% to 20%, with small ag and turf sales down 10%. Further, construction and forestry equipment sales are expected down 10% to 15%.
That outlook doesn't include "the uncertain and rapidly evolving environment" involving Trump administration policies, primary Trump tariffs. However, the cut to funding of the U.S. Agency for International Development also reportedly puts at risk $2 billion in U.S. commodity purchases for humanitarian food aid.
With that asterisk, and the help of a lower Q1 tax rate, Deere stuck by its prior 2025 outlook of $5 billion to $5.5 billion in net income and $4.5 billion to $5.5 billion in net operating cash flow.
Revised 25% Trump tariffs on steel and aluminum announced on Monday are expected to raise the cost of producing machinery in the U.S., which could affect Deere profit margins.
That's even before threatened 25% tariffs on imports from Canada and Mexico, and other reciprocal tariffs Trump plans to announce today. Deere said 10% of its cost of goods comes from Mexico.
Deere Stock Falls Early
Deere fell 2.2% to 461.93 in Thursday trade, bouncing back from a 4% loss after the earnings announcement. Deere had been in a buy zone, above a 469.39 buy point from a seven-week cup base.
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