Deere reported a strong third quarter, beating expectations and raising its full-year guidance due to strong execution, favorable tariff refunds, and solid performance in its construction and small ag/turf segments. Management reaffirmed that 2026 is the bottom of the ag cycle, noting that early order programs for planters and sprayers are up mid-single digits. However, the company flagged modest production cuts in South America and expects a slower, measured recovery in 2027. Deere reported EPS of $5.10, beating expectations, and raised its FY2026 net income guidance to $4.75-$5.0 billion and cash flow to $5.0-$5.5 billion.
Deere reported a strong third quarter, beating expectations and raising its full-year guidance due to strong execution, favorable tariff refunds, and solid performance in its construction and small ag/turf segments. Management reaffirmed that 2026 is the bottom of the ag cycle, noting that early order programs for planters and sprayers are up mid-single digits. However, the company flagged modest production cuts in South America and expects a slower, measured recovery in 2027. Deere reported EPS of $5.10, beating expectations, and raised its FY2026 net income guidance to $4.75-$5.0 billion and cash flow to $5.0-$5.5 billion.
Early order programs for planters and sprayers are up mid-single digits versus last year, signaling a modest recovery in ag equipment demand. Construction and forestry order books are largely full and extend into fiscal 2027, with retail demand outpacing production. Small ag…
Early order programs for planters and sprayers are up mid-single digits versus last year, signaling a modest recovery in ag equipment demand. Construction and forestry order books are largely full and extend into fiscal 2027, with retail demand outpacing production. Small ag…
Management highlighted strong adoption of precision technologies, including a doubling of factory-installed See & Spray orders and 40% of 2027 planters with advanced offerings, and emphasized AI-enabled capabilities in the John Deere Operations Center as a future driver of value.
Reported gross margin was 37.03%, reinforcing the quarter's better-than-guided profitability.
Management highlighted strong adoption of precision technologies, including a doubling of factory-installed See & Spray orders and 40% of 2027 planters with advanced offerings, and emphasized AI-enabled capabilities in the John Deere Operations Center as a future driver of value.
Early order programs for planters and sprayers are up mid-single digits versus last year, signaling a modest recovery in ag equipment demand. Construction and forestry order books are largely full and extend into fiscal 2027, with retail demand outpacing production. Small ag and turf demand remains stable with positive order books.
Management expressed confidence in execution and the trough of the ag cycle, while maintaining a measured tone about recovery pace.
“But remember, in these products, especially planters, Canada is a very limited part of our portfolio.”
“customer backlogs now extend well into fiscal year 2027, providing healthy visibility and optimism for next year. ... we are producing modestly below retail demand. This puts field inventories at a healthy starting position for next year”
“our net tariff exposure this year is approximately $750-ish. Going into next year, we would expect a run rate that is going to be closer to right around $1 billion for the year. So there will be a bit of a step up in our tariff expense nex…”
“Today, anywhere from 30% to 35% of earth-moving transactions start as a rental, and we continue to see that grow... we've also seen an increased appetite for some of them to invest in expanding their rental fleet”
“we are seeing modest improvements in order intake versus the prior year... results are up mid-single digits compared to the completion of last year's program. ... This is an encouraging signal that reinforces our view that 2026 represents…”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | $5B–$5.5B | $5.25B | RAISED |
| Op marginPRODUCTION_PRECISION_AG | FY2026 | 11%–12% | 11.5% | MAINTAINED |
| Op marginSMALL_AG_TURF | FY2026 | 14.5%–15.5% | 15% | MAINTAINED |
| Op marginCONSTRUCTION_FORESTRY | FY2026 | 10.5%–11.5% | 11% | MAINTAINED |
| Revenue | FY2026 | $4.75B–$5B | $4.875B | RAISED |