After a tough first quarter, the second quarter of John Deere’s fiscal year yielded another year-over-year drop in net sales and net profit, plus a $100 million negative impact from the ongoing tariff war.
Worldwide net sales and revenues came in at $12.8 billion, down 16% year-over-year from $15.2 billion in Deere’s previous first quarter. For the first six months of its fiscal year, Deere’s worldwide net sales were down 22% year-over-year to $21.3 billion.
Net income in the quarter fell 24% to $1.8 billion vs. $2.4 billion in the previous first quarter. Net income for the first six months was down 35% to $2.7 billion.
For its construction and forestry business, Deere saw just under $3 billion in first quarter net sales, down 23% year-over-year from $3.8 billion. This included a $244 million year-over-year decline in sales volume. First six months net sales for construction and forestry were down 30% year-over-year to $4.9 billion.
Construction & forestry operating profit was down 43% in the first quarter to $379 million and down 64% for the first six months to $444 million.
Speaking during the earnings call, Josh Beal, director of investor relations, said Deere’s earthmoving production facilities had returned to production levels that match retail demand, after the factories had been shut down for over a month in the first quarter to settle inventories.
Beal also said the company’s second quarter results were impacted by roughly $100 million in incremental tariff headwinds. The company expects its pre-tax tariff impact in 2025, based on assumptions as of May 13 that current tariffs remain in place, will be just over $500 million. Roughly 40% of that $500 million headwind would impact Deere’s construction & forestry business.
During the earnings call presentation, Deere reported that 79% of its U.S. equipment sales are built in the U.S. and 76% of its components for machines built in the U.S. are sourced from U.S.-based companies. Additionally, 2% of Deere’s components are sourced from China.
The majority of John Deere equipment sold stateside that is not also made in the U.S. are midsized tractors and roadbuilding equipment made in Europe, according to Beal.
Deere forecasts its net income for its fiscal year 2025 will land between $4.75 billion and $5.5 billion. Construction & forestry sales for the full fiscal year are forecast down 10% to 15%.
