Deere Reports Q3 Net Income of $1.38 Billion, Raises Full-Year Guidance
The Moline-based equipment manufacturer beat expectations and affirmed 2026 as the bottom of the agricultural equipment cycle, with strong performance in Construction & Forestry offsetting weakness in large agriculture.
Deere Beats Expectations, Lifts Outlook
Deere & Company reported third-quarter net income of $1.379 billion, or $5.10 per share, for the quarter ended August 2, 2026, compared with $1.289 billion, or $4.75 per share, in the same period last year (8-K filing, 2026-08-20). The Moline, Illinois-based manufacturer raised its full-year net income guidance to a range of $4.75 billion to $5.00 billion.
Worldwide net sales and revenues increased 5 percent to $12.608 billion for the third quarter and rose 7 percent to $35.589 billion for the nine-month period (8-K filing, 2026-08-20).
"Deere delivered a strong quarter, reflecting disciplined execution by our teams and continued resilience across our portfolio," said John C. May, chairman and chief executive officer. "Our performance underscores the strength of our business, supported by stable U.S. market conditions, our ability to manage softer conditions in Brazil and Europe, and our commitment to helping customers succeed" (8-K filing, 2026-08-20).
Mixed Segment Performance
The company's Production & Precision Agriculture segment saw net sales decline 6 percent to $3.998 billion, with operating profit falling 9 percent to $527 million as lower shipment volumes outweighed favorable price realization (8-K filing, 2026-08-20). Operating margin compressed to 13.2 percent from 13.6 percent in the prior year.
In contrast, the Small Agriculture & Turf division posted robust growth, with sales increasing 12 percent to $3.383 billion and operating profit jumping 28 percent to $622 million (8-K filing, 2026-08-20). Operating margin expanded to 18.4 percent from 16.0 percent.
Construction & Forestry delivered the strongest performance, with sales surging 18 percent to $3.618 billion and operating profit nearly doubling to $436 million, an 84 percent increase (8-K filing, 2026-08-20). Operating margin improved sharply to 12.1 percent from 7.7 percent, driven primarily by favorable price realization.
Financial Services net income rose 7 percent to $219 million, benefiting from favorable financing spreads despite a lower average portfolio (8-K filing, 2026-08-20).
Tariff Recoveries and Cycle Bottom
The company recorded tariff recoveries of $110 million in the third quarter and $382 million for the nine-month period (8-K filing, 2026-08-20).
Looking ahead, May stated: "We continue to believe 2026 will mark the bottom of the current ag equipment cycle. Across our business, early order program trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation" (8-K filing, 2026-08-20).
Full-Year Outlook
For fiscal 2026, Deere expects Production & Precision Agriculture net sales to decline approximately 10 percent, while Small Agriculture & Turf is projected to rise roughly 15 percent and Construction & Forestry is forecast to increase about 20 percent (8-K filing, 2026-08-20). Financial Services net income is expected to reach approximately $870 million.
MarginX data shows Deere is scheduled to report fourth-quarter 2026 results on November 25, 2026, with upcoming FOMC rate decisions on September 16 and October 28 potentially influencing equipment financing conditions.
This article was generated by MarginX from the 8-K filing on 2026-08-20. It is not investment advice.