Deere & Co (NYSE:DE) stock fell 8.04% (As on August 14, 11:31:23 AM UTC-4, Source: Google Finance) after the company reported a drop in third-quarter profit and warned of a bigger tariff hit than previously expected. U.S. President Donald Trump’s sweeping tariffs have impacted companies across sectors, especially the manufacturing and industrial firms that rely significantly on imported raw materials. This has added to the woes of farm-equipment makers who were already grappling with slow demand due to a slump in crop prices for wheat, corn and soybeans in North America and farmers opting to rent machinery instead of buying. The company now expects a pre-tax tariff impact of nearly $600 million for the year, compared with $500 million projected last quarter. In the third quarter, the levies cost the company nearly $200 million, as tariff policies shifted quickly. The company’s cost-saving measures, which have included 1,985 layoffs at its Iowa plants and facilities, including in Ankeny, Davenport, Dubuque, Johnston, Ottumwa and Waterloo, since June 2024 also helped it top analyst estimates for third-quarter profit and revenue. Third-quarter operating profit from two of Deere’s largest units, which produce tractors, combines and construction equipment, roughly halved from a year earlier. Deere’s net income in the third quarter came in at $1.29 billion compared with $1.73 billion, a year earlier.

Meanwhile, the Production and Precision Agriculture segment, Deere’s largest business unit, experienced the most significant decline with net sales down 16% and operating profit plummeting 50% to $580 million from $1.16 billion in Q3 2024. Volume and mix were the primary negative factors, accounting for a $494 million reduction in operating profit.

DE in the third quarter of FY25 has reported the adjusted earnings per share of $4.75, beating the analysts’ estimates for the adjusted earnings per share of $4.63, according to data compiled by LSEG. The company had reported the adjusted revenue decline of 9 percent to $10.36 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $10.31 billion.

The company cut the higher end of its annual profit forecast to $5.25 billion from $5.50 billion, but kept the lower end intact at $4.75 billion. Global companies that reported between July 16 and August 8 projected a combined financial hit of $13.6 billion to $15.2 billion for the full year, a Reuters’ tariff tracker shows. In May, Deere said it expected tariffs to cost over $500 million in 2025 before taxes, and that it was prepared to invest $20 billion in the U.S. over the next decade.