Third Quarter 2026
Filed Aug 20, 2026Deere Reports Third Quarter Net Income of $1.379 Billion
Third-quarter net sales and revenues increased 5% to $12.608 billion, net income attributable to Deere & Company increased 7% to $1.379 billion, and Construction & Forestry and Small Agriculture & Turf posted double-digit sales growth and higher operating profit. The company also improved fiscal 2026 net-income guidance to $4.75 billion to $5.00 billion, although Production & Precision Agriculture sales and operating profit declined.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net sales and revenuesGAAP | $12.608 billion | – | 5% |
| Net salesGAAP | $10.999 billion | – | – |
| Finance and interest incomeGAAP | $1.353 billion | – | – |
| Other incomeGAAP | $256 million | – | – |
| Cost of salesGAAP | $7.939 billion | – | – |
| Research and development expensesGAAP | $567 million | – | – |
| Selling, administrative and general expensesGAAP | $1.220 billion | – | – |
| Interest expenseGAAP | $710 million | – | – |
| Other operating expensesGAAP | $290 million | – | – |
| Total operating profitGAAP | $1.856 billion | – | 18% |
| Income of Consolidated Group before Income TaxesGAAP | $1.882 billion | – | – |
| Provision for income taxesGAAP | $529 million | – | – |
| Net income attributable to Deere & CompanyGAAP | $1.379 billion | – | 7% |
| Basic EPSGAAP | $5.11 per share | – | – |
| Diluted EPSGAAP | $5.10 per share | – | – |
| Tariff recoveriesGAAP | $110 million | – | – |
| Nine-month total net sales and revenuesGAAP | $35.589 billion | – | 7% |
| Nine-month net salesGAAP | $30.779 billion | – | – |
| Nine-month total operating profitGAAP | $4.867 billion | – | 4% |
| Nine-month net income attributable to Deere & CompanyGAAP | $3.808 billion | – | -4% |
| Nine-month diluted EPSGAAP | $14.06 per share | – | – |
| Nine-month net cash provided by operating activitiesGAAP | $3.250 billion | – | – |
| Nine-month net cash used for investing activitiesGAAP | $825 million | – | – |
| Nine-month net cash used for financing activitiesGAAP | $1.828 billion | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Production & Precision AgricultureSales decreased as a result of lower shipment volumes, partially offset by favorable price realization and foreign currency translation. Operating profit decreased primarily due to lower shipment volumes / sales mix and higher production costs, partially offset by favorable price realization and the effects of foreign currency exchange. Operating profit was $527 million, down 9%, and operating margin was 13.2% compared with 13.6%. | $3.998 billion | – | -6% |
| Small Agriculture & TurfSales increased as a result of higher shipment volumes and favorable price realization. Operating profit increased primarily due to higher shipment volumes / sales mix and favorable price realization, partially offset by higher production costs. Operating profit was $622 million, up 28%, and operating margin was 18.4% compared with 16.0%. | $3.383 billion | – | 12% |
| Construction & ForestrySales increased primarily as a result of higher shipment volumes and favorable price realization. Operating profit increased primarily due to favorable price realization, partially offset by higher SA&G and R&D costs. Operating profit was $436 million, up 84%, and operating margin was 12.1% compared with 7.7%. | $3.618 billion | – | 18% |
| Financial ServicesNet income was $219 million, up 7%, primarily due to favorable financing spreads, partially offset by the impact of a lower average portfolio. Operating profit was $271 million, up 2%. | $1.371 billion | – | -3% |
| Other revenuesNo driver was provided. | $238 million | – | -2% |
Fiscal 2026 outlook
- NoteNet income attributable to Deere & Company: $4.75 billion to $5.00 billion.
- NoteU.S. & Canada Large Ag industry outlook: Down 15 to 20%.
- NoteU.S. & Canada Small Ag & Turf industry outlook: Flat to up 5%.
- NoteEurope industry outlook: Flat.
- NoteSouth America (Tractors & Combines) industry outlook: Down 15 to 20%.
- NoteAsia industry outlook: Flat.
- NoteU.S. & Canada Construction Equipment industry outlook: Up 5 to 10%.
- NoteU.S. & Canada Compact Construction Equipment industry outlook: Up ~5%.
- NoteGlobal Forestry industry outlook: Down ~10%.
- NoteGlobal Roadbuilding industry outlook: Up ~10%.
- NoteProduction & Precision Ag net sales: Down ~10%; currency translation: +2.5%; price realization: ~ +1.0%.
- NoteSmall Ag & Turf net sales: Up ~15%; currency translation: +0.5%; price realization: ~ +1.5%.
- NoteConstruction & Forestry net sales: Up ~20%; currency translation: +1.5%; price realization: ~ +3.0%.
- NoteFinancial Services net income: ~ $870 million.
Capital returns
- Dividends declared were $1.62 per share for the third quarter and $4.86 per share for the first nine months, unchanged from the corresponding prior-year periods.
- Dividends paid were $1.62 per share for the third quarter, unchanged from the prior year, and $4.86 per share for the first nine months, compared with $4.71 per share.
- Nine-month repurchases of common stock were $697 million, compared with $1.136 billion.
- Nine-month dividends paid were $1.316 billion, compared with $1.282 billion.
What drove it
- Worldwide net sales and revenues increased 5% in the third quarter to $12.608 billion.
- Small Agriculture & Turf and Construction & Forestry sales increased due to higher shipment volumes and favorable price realization.
- Construction & Forestry operating profit benefited primarily from favorable price realization.
- Financial Services net income benefited from favorable financing spreads.
- The company recorded tariff recoveries of $110 million in the third quarter and $382 million in the first nine months of 2026.
- Management cited stable U.S. market conditions, early order program trends, improving used-equipment inventories, and increasing customer adoption of advanced technologies.
Concerns
- Production & Precision Agriculture net sales declined 6% and operating profit declined 9%, driven by lower shipment volumes / sales mix and higher production costs.
- Production & Precision Agriculture operating margin was 13.2%, compared with 13.6%.
- Financial Services revenues declined 3%, and its favorable financing spreads were partly offset by a lower average portfolio.
- The fiscal 2026 industry outlook calls for U.S. & Canada Large Ag and South America tractors and combines to be down 15 to 20%, and Global Forestry to be down ~10%.
- Nine-month net income attributable to Deere & Company declined 4% to $3.808 billion, while the prior-year periods were affected by special items.
- The company identified uncertainty around tariffs and retaliatory trade regulations, customer demand and inventory management, commodity conditions, interest rates, currency fluctuations, supply chains, and global political and economic instability as risks.
What to watch
- Early order program trends and whether management's expectation that 2026 marks the bottom of the current ag equipment cycle continues to be supported.
- Production & Precision Agriculture shipment volumes, sales mix, production costs, and progress toward its fiscal 2026 net-sales outlook of down ~10%.
- The extent to which improving used-equipment inventories and advanced-technology adoption support equipment demand.
- Execution against fiscal 2026 Small Ag & Turf net-sales guidance of up ~15% and Construction & Forestry guidance of up ~20%.
- Tariff effects, including whether tariff recoveries and production-cost impacts continue.
- Financial Services performance against net-income guidance of ~ $870 million and the effect of financing spreads and average portfolio levels.
Balance sheet and cash flow
- Cash and cash equivalents were $8.928 billion at August 2, 2026, compared with $8.276 billion at November 2, 2025 and $8.580 billion at July 27, 2025.
- Marketable securities were $1.350 billion at August 2, 2026, compared with $1.411 billion at November 2, 2025 and $1.407 billion at July 27, 2025.
- Inventories were $7.811 billion at August 2, 2026, compared with $7.406 billion at November 2, 2025 and $7.713 billion at July 27, 2025.
- Trade accounts and notes receivable, net, were $7.723 billion at August 2, 2026, compared with $5.317 billion at November 2, 2025 and $6.103 billion at July 27, 2025.
- Financing receivables, net, were $42.860 billion at August 2, 2026, compared with $44.575 billion at November 2, 2025 and $43.930 billion at July 27, 2025.
- Short-term borrowings were $17.115 billion at August 2, 2026, compared with $13.796 billion at November 2, 2025 and $14.607 billion at July 27, 2025.
- Short-term securitization borrowings were $6.095 billion at August 2, 2026, compared with $6.596 billion at November 2, 2025 and $7.610 billion at July 27, 2025.
- Long-term borrowings were $40.626 billion at August 2, 2026, compared with $43.544 billion at November 2, 2025 and $44.429 billion at July 27, 2025.
- Total liabilities were $79.566 billion at August 2, 2026, compared with $79.989 billion at November 2, 2025 and $82.553 billion at July 27, 2025.
- Total Deere & Company stockholders' equity was $27.990 billion at August 2, 2026, compared with $25.950 billion at November 2, 2025 and $25.175 billion at July 27, 2025.
- Nine-month purchases of property and equipment were $716 million, compared with $852 million.
- Nine-month acquisitions of businesses, net of cash acquired, were $455 million, compared with $89 million.
- Cash, cash equivalents, and restricted cash at the end of the nine months were $9.150 billion, compared with $8.847 billion.
Analysis
Deere reported a stronger third quarter, with worldwide net sales and revenues rising 5% to $12.608 billion and net income attributable to Deere & Company increasing 7% to $1.379 billion. Diluted EPS was $5.10 per share, compared with $4.75 per share. Total operating profit increased 18% to $1.856 billion. The company also recorded $110 million of tariff recoveries in the quarter, with tariff effects for each segment primarily included in production costs.
The growth mix was led by Construction & Forestry and Small Agriculture & Turf. Construction & Forestry net sales rose 18% to $3.618 billion and operating profit rose 84% to $436 million, with operating margin reaching 12.1% from 7.7%. Small Agriculture & Turf net sales increased 12% to $3.383 billion, operating profit rose 28% to $622 million, and operating margin increased to 18.4% from 16.0%. Higher shipment volumes and favorable price realization supported both businesses, while Construction & Forestry also absorbed higher SA&G and R&D costs.
Production & Precision Agriculture remained the counterweight. Its net sales declined 6% to $3.998 billion, operating profit declined 9% to $527 million, and operating margin declined to 13.2% from 13.6%. Deere attributed the sales decline to lower shipment volumes, partly offset by favorable pricing and currency translation. Lower shipment volumes and sales mix as well as higher production costs weighed on segment profit. Financial Services net income increased 7% to $219 million on favorable financing spreads, partly offset by a lower average portfolio, while Financial Services revenues declined 3% to $1.371 billion.
For the first nine months, net sales and revenues increased 7% to $35.589 billion, but net income attributable to Deere & Company declined 4% to $3.808 billion. The filing notes that prior-year results were affected by special items. Operating cash flow for the nine months was $3.250 billion versus $3.464 billion, while receivables related to sales increased by $1.252 billion and inventories increased by $443 million in the cash-flow statement. Deere repurchased $697 million of common stock and paid $1.316 billion of dividends during the nine-month period.
Management improved fiscal 2026 net-income guidance to $4.75 billion to $5.00 billion and described 2026 as the bottom of the current ag equipment cycle. The outlook remains uneven: Production & Precision Ag net sales are forecast down ~10%, while Small Ag & Turf is forecast up ~15% and Construction & Forestry up ~20%. Industry expectations still call for Large Ag in the U.S. and Canada and South America tractors and combines to be down 15 to 20%. Investors should focus on whether early order program trends, used-equipment inventories, and technology adoption offset continued volume pressure in Production & Precision Agriculture.
Management, verbatim
Deere delivered a strong quarter, reflecting disciplined execution by our teams and continued resilience across our portfolio.
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.
John C. May, chairman and chief executive officer
As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle.
John C. May, chairman and chief executive officer
Not in the filing
stated, not guessed- Previous-quarter outlook or prior guidance for comparison
- Free cash flow
- Gross margin
- Non-GAAP financial measures
- Forward revenue, gross-margin, operating-expense, or tax-rate guidance
- Sequential quarterly comparisons
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.