Worldwide net sales and revenues dropped 30% in the first quarter for Deere & Company to $8.5 billion, down from $12.2 billion in Q1 2024. Net income was down 50% to $869 million compared to $1.8 billion the previous quarter.
Net sales of construction and forestry equipment dropped 38% to $2.0 billion in the quarter. Sales in Q1 2024 were $3.2 billion. Profit in the division dropped 89% to $65 million compared to $566 million in the same period a year ago. Agriculture sales dropped 37% to $3.1 billion with operating profit dropping 68% to $338 million.
The company said construction sales decreased as a result of lower shipments, and profit dropped “primarily due to lower shipment volumes / sales mix, unfavorable price realization, and higher SA&G and R&D expenses.”
In its earnings call, company officials noted that Deere had been “right-sizing” manufacturing and underproduced by 35% current demand in earthmoving. It expects to ramp up production in the back half of the year.
Officials said equipment purchases remain constrained due to high interest rates, and there is strong price competition.
Deere & Co. 2025 construction outlook
Net sales in the construction division is forecast to be down 10% to 15%. In units:
- 10% decline in construction & forestry
- 5% decline in compact construction equipment
- Flat for global roadbuilding
In listing the risks for the current year, Deere cited uncertainties in “government policies and actions in respect to global trade, tariffs, and trade agreements.” It said these conditions may affect its “ability to sell products domestically or internationally, continue production at certain international facilities, procure raw materials and components, accurately forecast demand and inventory, manage increased costs of production, absorb or pass on increased pricing, predict financial results, and remain competitive based on these actions and policies.”
In addressing tariffs, the company said the “situation is fluid” and it is monitoring changes in policy. Regarding the recent tariffs on China, the company said it would have an “immaterial impact.”
