Deere & Co. reported first‑quarter 2026 results that included a net income of $656 million, or $2.42 per diluted share, a 25 % decline from the same period a year earlier. Total revenue rose 13 % to $9.611 billion, driven by a 34 % increase in construction and forestry sales and a 24 % rise in small agriculture and turf revenue. The company’s operating profit in the Production & Precision Agriculture segment fell 59 % to $139 million, while operating margins in construction and forestry more than doubled to $137 million and small agriculture and turf saw a 58 % jump in operating profit.
The sharp contraction in the Production & Precision Agriculture segment reflects a 4.4 % operating margin in Q1 2026 versus 11.0 % in Q1 2025, largely due to higher tariff costs and a weaker large‑ag mix. In contrast, construction and forestry benefited from a stronger demand mix and improved pricing power, which lifted operating margins to 12.6 % in FY 2025 and more than doubled operating profit to $137 million in Q1 2026. Small agriculture and turf also posted a 58 % increase in operating profit, supported by a 34 % sales lift and a favorable mix of high‑margin turf equipment.
Deere raised its full‑year 2026 profit guidance to $4.5 billion–$5.0 billion, up from the prior range of $4.0 billion–$4.75 billion. The upgrade signals management’s confidence that 2026 will represent the bottom of the North American large‑ag cycle and that construction and small‑ag markets will continue to recover. The company’s Smart Industrial strategy is cited as delivering higher cycle‑over‑cycle performance, with equipment operating margins of 12.6 % in FY 2025 despite a 24 % decline in Production & Precision Agriculture sales.
"While the global large agriculture industry continues to experience challenges, we're encouraged by the ongoing recovery in demand within both the construction and small agriculture segments," said John May, chairman and CEO. "These positive developments reinforce our belief that 2026 represents the bottom of the current cycle and provides us with a strong foundation for accelerated growth going forward." May also highlighted sustained investment in research and development, noting that the company’s R&D pipeline is expected to deliver new products across all business segments.
The market reacted positively to the results, with investors focusing on Deere’s strong earnings beat—EPS of $2.42 versus an estimate of $1.92, a 26 % beat—and a revenue beat of $9.61 billion versus an estimate of $7.6 billion, a 26 % beat. The guidance upgrade further reinforced confidence in the company’s trajectory.
Deere operates in a competitive landscape that includes AGCO and CNH Industrial. Recent strategic moves include the acquisition of intellectual property from Risutec Oy to bolster its silviculture strategy and the Tenna acquisition to expand its digital solutions portfolio for job‑site management. Tariff costs remain a headwind, with projected annual tariff expenses of $1.2 billion pre‑tax, but the company’s diversified portfolio and focus on high‑margin segments are positioned to mitigate these pressures.
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