Thanks, John. We'll now proceed with our remarks on the quarter. John Deere delivered a better than expected second quarter with an 18.8% margin for the equipment operations, demonstrating exceptional execution amidst challenging market dynamics. Notably, margins exceeded projections despite tear-up headwinds due to better-than-expected sales and favorable production costs stemming from efficiency gains in our material sourcing and factory operations. However, as we look to the second half of the year, global uncertainty continues to weigh on customer sentiment across end markets. And while the top end of our fiscal 2025 outlook remains relatively unchanged from prior guidance, a fluid tariff environment has led us to broaden our guidance range as we actively work to mitigate impacts to both our customers and Deere. Slide 4 opens with our results for the second quarter.
Net sales and revenues were down 16% to $12.763 billion, while net sales for the equipment operations were down 18% to $11.171 billion. Net income attributable to Deere and company was $1.804 billion, or $6.64 per diluted share.
Turning to our individual segments, we begin with the production and precision Ag business on Slide 5. Net sales of $5.23 billion were down 21% compared to the second quarter last year, primarily due to lower shipment volumes.
Price realization was positive, but just under one point. Currency translation was negative, but roughly two points. Operating profit was $1.148 billion, resulting in a 22% operating margin for this segment.
The year-over-year decrease was primarily due to lower shipment volumes and an unfavorable sales mix, coupled with the negative effects of foreign currency exchange. These headwinds were partially offset by lower production costs and price realization. Moving now to Small Ag and Turf on Slide 6. Net sales were down 6%, totaling $2.994 billion in the second quarter, as a result of lower shipment volumes, partially offset by price realization.
Price realization was positive by just under one point. Currency translation was negative by roughly half a point. Operating profit was approximately flat year-over-year at $574 million, resulting in a 19.2% operating margin. Lower production costs, lower warranty expenses, and price realization were offset by lower shipment volumes and an unfavorable sales mix.
Slide 7 gives our industry outlook for Ag and turf markets globally. We continue to expect large Ag equipment industry sales in the U.S. and Canada to be down approximately 30% due to pressures from high interest rates, elevated late model used inventory levels, and trade uncertainty. These headwinds are slightly mitigated by stable crop prices, even tighter global stocks, and bolstered farm balance sheets strengthened by the distribution of government funds. For small Ag and turf in the U.S. and Canada, industry demand is now expected to be down between 10% and 15%. While the dairy and livestock segment remains at historically strong levels of profitability and certain high-value crops like almonds return to profitability, equipment purchases remain subdued due to prevailing uncertainties and elevated costs. Demand has been further restrained by deterioration in turf and compact utility tractor sales due to consumer confidence and high interest rates weighing on purchase decisions.
Moving to Europe, the industry is still projected to decrease approximately 5%. Sentiment in the region is trending higher, given strong dairy and livestock margins and an improving arable outlook. Stabilized commodity prices and input costs, along with improving interest rate environment, should provide more planning certainty despite the low average yields in key markets. In South America, industry sales forecast for tractors and combines remain roughly flat. In Brazil, sentiment continues to improve as crop yields recover and corn and soybean profitability returns. Additionally, continued high margins in coffee production are driving increased demand for small and mid-sized tractors. However, record crop production levels are likely to put pressure on commodity prices, capping overall growth in farm profitability for the region, while high interest rates continue to temper demand. Industry sales in Asia are now projected to be flat as the outlook for tractor sales in India improves, supported by favorable growing conditions, steady crop acreage, and increased availability for agricultural credit. Next, our segment forecasts begin on Slide 8.
For production and precision Ag, our net sales forecast for the full year remains down between 15% and 20%. The forecast now assumes roughly 1.0 of positive price realization for the full year, offset by 1.5 points of negative currency translation. Our full year forecast for the segment's operating margin is now between 15.5% and 17%, primarily due to tariff impacts. Slide 9 shows our forecast for the small Ag and turf segment. We now expect net sales to be down between 10% and 15%. The guide includes 0.5 point of positive price realization and flat currency translation. Reduction from the prior quarter is primarily due to softening demand in the U.S. turf and compact utility tractor segments, partially offset by improved sales projections for mid-sized tractors in Europe and small tractors in India. The segment's operating margin guide is now between 11.5% and 13.5%, primarily due to tariff impacts and the reduction in projected U.S. turf and compact utility tractor shipment volumes. Shifting over to construction and forestry on Slide 10.
Net sales for the quarter declined roughly 23% year-over-year to $2.947 billion due to lower shipment volumes. Price realization was negative by just under 1.5 points. Currency translation was also negative by roughly less than 0.5 point. Operating profit was down year-over-year at $379 million, resulting in a 12.9% operating margin due primarily to lower shipment volumes and an unfavorable sales mix as well as negative price realization.
Slide 11 describes our construction and forestry outlet. Industry sales projections for earth moving equipment in the U.S. and Canada remain unchanged with construction equipment expected to be down around 10% and compact construction equipment expected to be down around 5%. And markets continue to see high utilization as construction backlogs are steady and construction employment remains at all-time highs. However, trade uncertainty and high interest rates are pressuring order activity for both construction and compact construction equipment. U.S. government infrastructure spending continues to provide support to the industry. However, projections for single-family housing starts are moderating given macro uncertainty and higher mortgage rates. Similarly, rental sales continue to soften while high interest rates continue to pressure multifamily and commercial real estate markets. Global forestry markets are expected to be flat to down 5% as all global markets remain challenged. Global road building markets are forecasted to be roughly flat with continued strong end market demand globally. In particular, record sales Alabama trade show in April reinforced the uptick we're seeing in sentiment and demand throughout Europe. Moving on to the Construction and Forestry segment outlook on Slide 12, 2025 net sales remain forecasted to be down between 10% and 15%. Net sales guidance for the year includes one point of negative net price realization and flat currency translation. The segment's operating margin is now projected to be between 8.5% and 11.5% due primarily to tariff impacts and, to a lesser degree, lower price realization. Now, transitioning to our financial services operations on Slide 13. Worldwide financial services net income attributable to Deere & Company in the second quarter was $161 million. Net income was flat due to less favorable financing spreads and a higher provision for credit losses which were offset by lower SA&G expenses and a reduction in derivative valuation adjustments. For fiscal year '25, our outlook remains at $750 million as benefits from a favorable compare to special items related to the sale of Banco John Deere and lower SA&G expenses are partially offset by less favorable financing spreads. And finally, Slide 14 outlines our guidance for net income, effective tax rate, and operating cash flow. For fiscal year 2025, our outlook for net income has widened to between $4.75 billion and $5.5 billion. Next, our guidance incorporates an effective tax rate between 20% and 22%. And lastly, cash flow from the equipment operations remains projected between $4.5 billion and $5.5 billion. This concludes our formal comments.
We'll now shift to a few topics specific to the quarter before we open up the lines to questions from our investors. Let's begin our discussion with Deere's performance in the quarter. We saw net sales increase sequentially, albeit down year-over-year. Additionally, margins were down roughly 2 points year-over-year but grew sequentially to come in at just under 19% for the quarter. While there are clearly macro headwinds at play the quarter represents strong operational performance. So Josh Beal, can you kick us off with a breakdown of the quarter?