Deere & Company Reports Strong Q4 Sales Growth but Faces Profit Margin Pressure

Deere & Company (DE), a global leader in agricultural, construction, and forestry machinery, reported its fourth-quarter 2025 financial results on November 26. The company posted net sales and revenues of approximately $12.4 billion, marking an 11% year-over-year increase and significantly surpassing analyst forecasts of $9.8-9.9 billion. Despite this strong top-line performance, diluted earnings per share (EPS) of $3.93, while slightly above the $3.85 consensus, fell by about 14% from the $4.55 reported a year ago. Net income attributable to Deere was approximately $1.07 billion for the quarter. The decline in profitability was attributed to compressed margins, rising input costs, and the impact of tariffs, which offset the revenue growth. By segment, Production & Precision Agriculture sales grew 10% to $4.74 billion, Small Agriculture & Turf sales rose 7% to $2.46 billion, and Construction & Forestry sales saw a significant 27% increase to $3.38 billion. However, operating profits in these segments were pressured. For the full 2025 fiscal year, Deere generated a solid net income of about $5 billion. Following the report, the company's stock fell 5% as investors focused on the deteriorating profitability. Currently, Deere stock trades roughly 13% below its 52-week high, with a dividend yield of 1.38%, and has underperformed the S&P 500 over the past year.