Deere Finds Traction Outside Big Ag

Deere opened the year with results that were lower year over year, but with revenues strong enough to justify a higher profit outlook. For the first quarter ended February 1, 2026, Deere reported net income of $656 million, or $2.42 per share, compared with $869 million, or $3.19 per share, a year earlier. Worldwide net sales and revenues rose 13% to $9.611 billion, and net sales were $8.001 billion versus $6.809 billion last year. The market treated the raised outlook like an early turning point signal, and the stock pushed to a new all time high after the report. The year over year profit decline looks a lot more explainable once you dig into the segments.

The segment breakdown shows exactly where the pressure and momentum sat. Production and Precision Agriculture posted $3.163 billion in net sales and $139 million of operating profit, with Deere citing higher tariffs, unfavorable sales mix, and higher warranty expense as key pressures. The brighter spots were the areas Deere called out as recovering. Small Agriculture and Turf net sales rose to $2.168 billion with $196 million of operating profit, helped by higher shipment volumes, price realization, and favorable currency translation. Construction and Forestry net sales climbed to $2.670 billion and operating profit increased to $137 million, driven by higher shipment volumes and favorable currency translation.

Deere closed the quarter by raising its full year profit forecast and pointing to early signs the cycle is bottoming. The company raised its fiscal 2026 net income forecast to $4.5 billion to $5.0 billion, and management said improving demand in construction and small agriculture supports the view that 2026 represents the bottom of the current cycle. Deere also pointed to sustained investment in research and development and an upcoming cadence of new products and solutions across segments as the cycle improves. Deere is not calling the all clear, but it is clearly signaling the direction of travel is improving. For now, investors have a simple checklist for the next few quarters - shipments, margins, and whether that product cadence shows up in results the same way it shows up in the plan.

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