John Deere Financial profit jumps 34%
Deere projects large ag equipment sales to plunge 30% this year
John Deere Financial’s net income surged in its fiscal third quarter as its leasing portfolio grew while equipment sales dropped at the parent company.
Deere & Co. continues to see muted equipment demand, especially in the agriculture sector, amid “high interest rates, elevated used inventory levels in late-model year machines and trade uncertainty,” Chris Seibert, manager of investor communications, said during today’s earnings call.
To address these challenges, the manufacturer added incentives in Q3, providing “support to customer buying decisions in the current interest rate environment,” Seibert said.
BY THE NUMBERS: John Deere Financial reported for its fiscal Q3 ending July 27:
- Net income totaled $205 million, up 34% year over year;
- Revenue fell 4.8% YoY to $1.4 billion;
- Net financing receivables rose 0.1% YoY to $43.9 billion;
- Net equipment on operating leases increased 5.5% YoY to $7.5 billion; and
- Provision for credit losses through the first nine months of fiscal 2025 landed at $240 million, up 13.2% YoY.
Meanwhile, the parent company reported:
- Total net sales and revenue dropped 8.6% YoY to $12 billion;
- Net income declined 25.7% YoY to $1.3 billion;
- Production and precision agriculture net sales fell 16.2% YoY to $4.3 billion;
- Small agriculture and turf net sales totaled $3 billion, down 0.9% YoY; and
- Construction and forestry net sales dropped 5.4% YoY to $3.1 billion.
Deere projects large agricultural equipment sales to plunge 30% in fiscal 2025 and small agriculture segment sales to slide 10% as low consumer confidence and elevated borrowing costs continue to weigh on purchasing decisions, Seibert said.
THE BIG PICTURE: Deere continues to adjust production strategies to navigate tariff impacts and address high dealer inventories, reflecting broader industry trends.
The company has “matched production to retail demand, enabling our company and dealers to respond swiftly to market shifts and customer needs,” Chairman and Chief Executive John May stated in today’s earnings release. “By continuing to address the high levels of used equipment in the industry, we’re building a healthier market for everyone.”
Lower production in small agriculture and construction segments “should be a year-over-year tailwind to our production as we move into 2026,” Chief Financial Officer Josh Jepsen said during the call.
NOTEWORTHY: Deere recently launched several early-order programs (EOPs) for 2026 model year equipment. Its EOP for planters will run through September, and the EOP for combines will run through December, Josh Beale, director of investor relations, said during the call.
Notably, the company has “generally shortened all the programs and introduced more flexibility for price adjustments given potential tariff changes,” he said.
MARKET REACTION: Shares of Deere & Co. [NYSE: DE] were down 6.8% from market open to $478.84 as of market close today. It has a market capitalization of $129.7 billion.
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