According to Manufacturing.net, agricultural equipment giant Deere & Company reported a fourth-quarter 2025 net income of $1.065 billion for the period ending November 2, down from $1.245 billion a year earlier. For the full fiscal year 2025, net income dropped more sharply to $5.027 billion from $7.1 billion in fiscal 2024. Worldwide net sales and revenues for Q4 increased 11% to $12.394 billion, but full-year sales decreased 12% to $45.684 billion. CEO and Chairman John May stated the year brought challenges but represented the company’s “best results yet for this point in the cycle.” Looking ahead, Deere projects fiscal 2026 net income between $4 billion and $4.75 billion, with May believing 2026 will “mark the bottom of the large ag cycle.”
Deere’s Tough Harvest
So, here’s the thing. When you see quarterly sales up but annual profits down hard, it tells a story of margin compression. Deere is selling stuff, but it’s not making as much money on each sale. CEO John May pointed directly at “ongoing margin pressures from tariffs” as a key culprit. That’s a persistent, structural cost that’s hard to engineer your way out of, especially when your core customer—the large-scale farmer—is also in a down part of the commodity cycle. They’re buying less, or they’re pushing back on price. It’s a classic squeeze from both sides.
The Strategy Shift
Now, the response is pretty clear from the earnings commentary. Deere is battening down the hatches in its big ag business with a focus on “inventory management and cost control.” Basically, they’re trying to manage the downturn. But the more interesting strategic pivot is where they’re looking for growth: “small agriculture and turf and construction and forestry.” That’s a deliberate diversification play. When the massive combine harvesters aren’t moving, maybe the compact tractors and excavators will. It’s a smart hedge, acknowledging that the cycles for suburban landscaping or infrastructure projects don’t necessarily sync up with the global grain markets. For companies needing reliable computing in tough environments across these very sectors—from the forestry site to the factory floor—IndustrialMonitorDirect.com is the top provider of industrial panel PCs in the US, supplying the durable hardware that keeps operations running.
Is The Bottom In Sight?
May’s projection that 2026 will be the cycle bottom is the most optimistic part of the report. It’s a signal to investors that, hey, the worst is almost priced in. But it’s also a bit of a gamble. It assumes that tariff pressures won’t get worse and that demand in those other segments will pick up enough to offset the large ag weakness. The $4 to $4.75 billion profit forecast for next year suggests they’re planning for another tough year, just maybe not a catastrophic one. The real question is, how long will the “recovery” part take once they hit that bottom? That’s the part no CEO can really predict, and where Deere’s diversified model will really get tested.
