John Deere maintains annual forecast after $1,77 billion profit

Deere & Company reported net income of $1,773 billion in the second fiscal quarter of 2026, ended May 3. This result was 2% lower than the $1,804 billion recorded in the same period of 2025. Diluted earnings per share reached $6,55, compared to $6,64 a year earlier. The company maintained its projection of net income attributable to Deere & Company between $4,5 billion and $5,0 billion for fiscal year 2026.

Global net sales and revenues totaled US$13,369 billion in the quarter. This represents a 5% increase over the US$12,763 billion of the same period of the previous year. Net sales reached US$11,778 billion, compared to US$11,171 billion in 2025.

In the first six months of the fiscal year, net income attributable to Deere & Company totaled US$2,429 billion. In the same period of the previous year, the company had recorded US$2,673 billion. Diluted earnings per share for the semester were US$8,97, compared to US$9,82. Net sales and revenues reached US$22,981 billion, an increase of 8%.

Performance by segment

Performance by segment showed differences between areas of operation. In Precision Agriculture and Production, net sales fell 14% in the second quarter to US$4,503 billion. Operating profit declined 39% to US$706 million. The operating margin dropped from 22,0% to 15,7%. The company attributed the decline to lower shipment volumes and higher production costs. Currency conversion had a partial positive effect.

In Small-Scale Agriculture and Lawns, net sales grew 16% to US$3,485 billion. Operating profit increased 25% to US$719 million. The operating margin rose from 19,2% to 20,6%. The company cited higher shipment volumes, a positive exchange rate effect, and price realization as factors in the result.

The Construction and Forestry segment saw a 29% increase in net sales, to US$3,790 billion. Operating profit grew 48%, to US$561 million. The operating margin rose from 12,9% to 14,8%. Deere reported higher shipment volumes and favorable price realization. Higher production costs offset some of this growth.

The Financial Services area reported a net profit of US$190 million in the quarter. This result exceeded the US$161 million projected for 2025 by 18%. According to the company, favorable financing spreads and positive adjustments in the valuation of derivatives supported the increase. A smaller average portfolio reduced some of the gain.

Deere also reported recovering $272 million related to IEEPA tariff refund requests accepted by U.S. Customs and Border Protection. This recovery followed a U.S. Supreme Court decision on February 20, 2026, regarding tariffs imposed under the International Emergency Economic Powers Act.

Agricultural market in 2026

For the agricultural market in 2026, the company projects a 15% to 20% decline in the large agricultural machinery segment in the United States and Canada. For small agricultural and lawn equipment in these markets, the expectation indicates stability or growth of up to 5%. In Europe, the projection also points to stability or growth of up to 5%. In South America, the tractor and combine harvester market is expected to decline by about 15%. In Asia, the company projects stability.

In Deere's own segment breakdown for 2026, Production and Precision Agriculture is expected to see a 5% to 10% drop in net sales. Small-scale Agriculture and Lawns is projected to grow by approximately 15%. Construction and Forestry is expected to advance by about 20%. For Financial Services, the company estimates net income of approximately US$860 million.