Key Takeaways
- Deere & Company is warning that tough market conditions, partially attributable to tariffs, will continue into next year.
- The manufacturer of big farm and construction equipment gave a full-year outlook below forecasts.
- The news offset better-than-expected profit and sales figures for the fiscal fourth quarter.
Shares of Deere & Company (DE) fell Wednesday morning after the maker of large farm and construction equipment gave a weak forecast and warned that “difficult market conditions” will continue for a while longer.
In the company’s fourth-quarter fiscal 2025 earnings report, CEO John May said “ongoing margin pressures from tariffs and persistent challenges in the large ag sector remain.” He added that Deere believes “ 2026 will mark the bottom of the large ag cycle.”
The company predicts next year’s net income will be in a range of $4.00 billion to $4.75 billion. Analysts surveyed by Visible Alpha were looking for $5.19 billion.
The outlook offset a strong fourth quarter. Deere reported earnings per share of $3.93, with revenue up 11% to $12.39 billion. Both exceeded the Visible Alpha estimates.
The Production & Precision Agriculture division posted a sales gain of 10% to $4.74 billion. Sales grew 7% to $2.46 billion at the Small Agriculture & Turf unit, and they soared 27% to $3.38 billion at the Construction & Forestry segment.
However, for fiscal 2026 Deere sees Production & Precision Agriculture sales falling 5% to 10%. They expect them to rise about 10% at both Small Agriculture & Turf and Construction & Forestry.
Deere shares were down 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.