Deere & Company reported third-quarter fiscal 2026 net income of $1.379 billion, up 7% from the prior year, as strong construction equipment demand offset weakness in large agriculture equipment. The company’s shares rose 8.59% to $630.48, approaching the 52-week high of $674.19.
Total net sales increased 5% to $12.608 billion, surpassing analyst expectations by $1.80 billion. Diluted earnings per share reached $5.10, beating the $4.69 estimate by 8.74%, compared with $4.75 in the year-ago quarter. Equipment operations net sales rose 6% to $10.999 billion, while operating margin expanded to 14.4%.
Segment performance highlighted contrasting trends. Construction & Forestry sales surged 18% to $3.618 billion, with operating profit nearly doubling to $436 million from $237 million a year earlier. Price realization of $244 million and modest volume gains of $22 million drove the improvement. In contrast, Production & Precision Agriculture sales declined 6% to $3.998 billion, with operating profit falling to $527 million from $580 million, reflecting volume and mix pressures of $124 million and production cost headwinds of $95 million. Small Ag & Turf sales rose 12% to $3.383 billion, with operating profit increasing to $622 million from $485 million, supported by favorable volume and mix, pricing, and cost benefits.
Deere benefited from $110 million in tariff refunds related to Section 232 changes, which reduced imported goods rates from approximately 25% to 15%. The company’s market capitalization stood at $168.76 billion, with a 12-month return on equity of 19% and a current ratio of 2.21. Dividend payments have been maintained for 56 consecutive years, with a current yield of 1.12% and a target payout ratio of 25–35% of mid-cycle earnings.
Industry data for July 2026 showed U.S. and Canada retail sales declines of 34% for 4WD tractors and 20% for combines, while Deere’s dealer inventories stood at 33% of trailing 12-month sales for large tractors and 25% for combines. The company projected fiscal 2026 net income attributable to Deere between $4.75 billion and $5.0 billion, with equipment operations operating margins compressed to 11–12% in Production & Precision Agriculture, reflecting what management described as the bottom of the cycle.
Full-year guidance included net operating cash flow of $5.0 billion to $5.5 billion, capital expenditures of approximately $1.3 billion, and an equipment operations effective tax rate of 24–26%. Brent Norwood, CFO, noted that a strong fourth-quarter order book supported narrowing guidance ranges despite a dynamic market backdrop.
