Deere & Company (DE) Earnings & Analysis

Latest quarter

Deere reported Q3 FY2026 revenue of $12.6 billion, compared with $12.0 billion in Q3 FY2025, while its consensus comparison recorded $11.0 billion of revenue against the consensus of $10.8 billion. The company’s adjusted EPS, as the consensus counts it, was $5.10 against the consensus of $4.79; Deere also reported diluted EPS of $5.10, compared with $4.75 a year earlier.

The filing said net sales and revenues increased because of higher sales volumes, favorable foreign-currency translation and favorable price realization. Deere attributed lower Production & Precision Agriculture sales to lower shipment volumes, mainly in Brazil and Europe, while Small Agriculture & Turf and Construction & Forestry sales rose on higher shipment volumes and favorable price realization. Gross margin was 37.0%, unchanged from a year earlier, while operating margin was 14.9%, compared with 13.3%. Deere reported free cash flow of $2.4 billion, compared with $3.0 billion a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On the earnings call, Chief Financial Officer Brent Norwood said the company’s year-to-date performance and a strong fourth-quarter order book across all segments enabled narrower guidance ranges and improved net-income and cash-flow forecasts. Norwood said the agricultural environment remained challenging, but Deere viewed 2026 as the bottom of the agricultural-equipment cycle and expected a recovery that would vary by region.

Norwood said inventory-management actions by Deere and its dealers had strengthened channel health, while Construction & Forestry and Small Agriculture & Turf continued to provide performance and profitability alongside Production & Precision Agriculture. He said Deere intended to maintain investment through the cycle in solutions intended to help customers do more with less.

Deanna Kovar said Deere’s pricing focus for early-order-program products and the wider Production & Precision Agriculture portfolio was to cover inflation as the company moved toward 2027. In response to questions on agricultural orders, Kovar said customers were seeking technologies for planting and spraying, citing higher adoption of factory-installed See & Spray systems and advanced planter technologies.

Analysts also asked about tariff costs and the timing of demand. Chris Seibert said the fiscal 2026 direct-tariff annual run rate was updated from $1.2 billion to $1.1 billion, primarily because of changes in Section 232 tariffs, excluding the positive effects of refunds. Seibert said it was too early to determine how policy developments could affect European demand because Deere was beginning to collect first-quarter orders.

On the fourth quarter, Norwood said Production & Precision Agriculture and Construction & Forestry net sales were expected to be similar to the third quarter. He said margins in Production & Precision Agriculture and Small Agriculture & Turf would decline somewhat as those divisions incurred a seasonally higher load of research and development and selling, administrative and general expenses.

Guidance

Deere said it improved its fiscal 2026 net-income outlook and forecast net income of $4.8 billion–$5.0 billion. The company narrowed Production & Precision Agriculture’s operating-margin forecast to 11.0%–12.0% and forecast net sales to decline approximately 10.0%. Deere increased Small Agriculture & Turf’s operating-margin guide to 14.5%–15.5%. The company increased its Worldwide Financial Services net-income outlook to $870.0 million. Seibert said Deere updated its fiscal 2026 direct-tariff annual run rate from $1.2 billion to $1.1 billion, excluding refund effects.