Third-quarter results beat estimates despite declines
John Deere has warned that tariffs may cost the agricultural machinery manufacturer up to $600 million in fiscal 2025. The company’s fiscal third-quarter earnings beat Wall Street forecasts on both revenue and profit, but net income fell 26% to $1.29 billion from $1.73 billion a year earlier, and total net sales dropped 9% to $12.02 billion. Shares fell around 7% in midday trading after the announcement.
Tariffs weigh heavily on performance
Director of Investor Relations John Beal told analysts that tariff costs totaled $200 million in the third quarter, bringing the year-to-date figure to $300 million. Deere now projects pre-tax tariff costs approaching $600 million for the full fiscal year. Operating profits were notably reduced due to these tariffs and related production expenses.
Updated guidance and market outlook
For the fiscal year, Deere trimmed its net income forecast to $4.75–$5.25 billion from its earlier $4.75–$5.5 billion range. CEO John May said the company remains committed to supporting customers’ immediate needs while positioning for future growth. Oppenheimer analyst Kristen Owen described Deere’s stance as “cautiously optimistic” amid a less favorable commodities environment and ongoing trade uncertainty.
Potential bright spots ahead
Despite near-term headwinds, Deere highlighted emerging demand growth in Europe and South America. Cory Reed, president of the worldwide agriculture and turf division, said the company anticipates “positive tailwinds” from potential trade deals and favorable tax policies. Deere continues to monitor market conditions closely as it navigates the challenging global landscape.
