“Now when we think about the first quarter of 2025, we expect top-line sales for the equipment operations to be down 15% to 20% sequentially from 4Q24, with margins 300 to 400 basis points lower than the full-year guide.”

In context

“softening. We finished 2024 with inventory-to-sales ratios for both mid-size tractors and combines at or slightly above the upper end of our targeted bands, which we feel necessitates further underproduction in those product lines in 2025. Order books in the region remain healthy, with orders for Mannheim tractors extending into the second quarter of the year. One additional point to highlight for the ag outlook broadly is that our implied 2025 decrementals are impacted by product and geographic mix. North American large ag equipment like combines and row crop tractors experienced larger reductions compared to the rest of the world. This is particularly noteworthy in the first quarter given the year-over-year comparison to strong North American large ag sales in the first quarter of 2024. Now when we think about the first quarter of 2025, we expect top-line sales for the equipment operations to be down 15% to 20% sequentially from 4Q24, with margins 300 to 400 basis points lower than the full-year guide. Additionally, we are forecasting production costs to be favorable again in 2025 for the equipment operations, driven primarily by improved material costs and lower overhead expenses, all despite significant volume reductions. Overall, we expect to see positive price costs for the full fiscal year, yet another example of the structural improvements our teams continue to deliver. Josh Beal: Thanks, Josh. That's a great walk around the world, as well as good additional insight into where we're projecting production costs in 2025. Now we've talked extensively about 2025 order books and new inventories, but a significant concern heading into next year is North American used inventories. Last quarter, we discussed the levers we were pulling to return to long-term averages. Cory, this next quest”