Deere reported Q1 results yesterday 2/13/25.   Revenues were $8.5b, fully $1.0 b LOWER than anaylst's estimates of $9.5b prior to the quarter's release.    Reported EPS was $3.19 per share down 48.8% from the prior but slightly HIGHER than analysts' estimates for $3.10 per share.   How could a company report a 10% miss in revenue and a beat on earnings?   Exceptional management, cost control and efficiencies? 

Nope.   Buried in a footnote on page 14 of the 8-K, the company notes that there were THREE large positive one-time items that all, remarkably, occured in the same Q1 25 period.   These include two discrete tax items which boosted net income by $110m and $53m and a third item that boosted pre-tax income by $32m.   Nowhere does the company provide the EPS impact of these three one-time items to allow investors to get to a true Adjusted EPS. 

So let me try.   Combining these three one time net income benefits of $110m plus $53m plus $28m (applying a 22% normalized tax rate on the pre-tax iitem) and dividing by 272.3m shares outstanding, Deere's reported earnings were $191m, or 70c per share, higher than they otherwise would have been.   Therefore, of the $3.19 reported EPS, 70c or 22% of quarterly EPS, resulted from these three one time positive items.   Without these items, reported net income would have equalled $678m and EPS would have equalled $2.49 per share.  This would have represented a very large 20% earnings miss to the $3.10/share that was expected.   

Is it possibe that all three of these positive one-time items actually occurred and were appropriately booked by the company in Q1?  Perhaps.    Or perhaps instead was creative accounting used to "find" these one time earnings offsets to spackle over what otherwise were very bad results?    With the stock trading today at near all time highs,, research analysta and investors appear to be giving Deere a pass on what appears to me to be "creative accounting" relating to the quarter.  Count me as highly skeptical of these results and the serendipitous timing of these three positive one time items.   And also critical of a management team that does not provide the transparancy to quantify and report  the impact on EPS of the combined impact of these one time items so that investors can readily see the true, underlying performance of the company for the quarter.