John Deere’s third-quarter earnings reveal more declining revenue and profit due to the ongoing tariff wars and a competitive North American construction equipment market.
Total third-quarter net sales and revenues were $12 billion, down 9% year-over-year from $13 billion in last year’s third quarter. For the first nine months of Deere’s fiscal year 2025, total net sales were down 18% to $33 billion.
Total net profit was down 26% in the third quarter to $1.3 billion and down 32% for the first nine months to just under $4 billion.
Deere’s construction and forestry segment reported another decline in net sales, which dropped 5% year-over-year in the third quarter to $3 billion and declined 22% for the first nine months of the fiscal year to $8 billion.
Construction operating profit was down 47% in the third quarter to $237 million and down 60% for the first three quarters of the fiscal year to $681 million. Deere’s third-quarter construction operating margin fell year-over-year from 13.8% to 7.7%.
Even though Deere saw a $59 million boost to its construction sales volume compared to the previous third quarter, that was more than offset by a $160 decline in price realization (the net difference between equipment's listed price and the actual selling price). Speaking during the earnings call, Deere’s Director of Investment Relations Josh Beal said the company took aggressive pricing actions in its North American construction equipment market where “competitive pressure has been tougher.”
Construction and forestry production costs also rose $74 million year-over-year due to higher tariffs. Beal said the company recorded roughly $200 million in total tariff costs in its third quarter, bringing its year-to-date tariff costs to around $300 million. Key areas impacted by tariffs for Deere’s third quarter were increased tariff rates on Europe, India and steel and aluminum.
Deere has raised its forecast for the pre-tax tariff impact on its full fiscal year 2025 from $500 million to around $600 million.
For the full fiscal year, Deere projects construction and forestry net sales will decline 10% to 15% year-over-year, and construction and forestry price realization will be down 0.2%.
