Deere (NYSE:DE) Raises Full-Year Net Income Guidance After Q3 EPS Beat

Deere & Company (NYSE: DE) reported Q3 2026 net income of $1.379 billion, or $5.10 per diluted share, for the quarter ended August 2, 2026, beating the analyst consensus estimate of $4.84 by 5.4%. The company simultaneously raised its full-year fiscal 2026 net income outlook to a range of $4.75 billion to $5.00 billion. Shares gained 6.94% on Thursday, August 20, while the S&P 500 fell 0.84%.

Q3 2026 Results

• EPS: $5.10 GAAP, up from $4.75 in Q3 2025, beating the $4.84 consensus estimate by 5.4%
• Total net sales and revenues: $12.608 billion, up 4.9% year-over-year from $12.018 billion
• Net income: $1.379 billion, up 7.0% from $1.289 billion in Q3 2025
• Total operating profit: $1.856 billion, up 18.4% year-over-year from $1.568 billion
• Operating margin: 14.7%, up 1.7 percentage points from 13.0% in the prior-year period

What Drove the Results

EPS of $5.10 beat the $4.84 consensus by 5.4%, and total operating profit grew 18.4% on a 4.9% revenue increase, reflecting a favorable shift in business mix. The Construction & Forestry segment was the standout performer, with net sales rising 18% to $3.618 billion and operating profit up 84% to $436 million, driven by higher shipment volumes and favorable price realization. The Small Agriculture & Turf segment also outperformed, with net sales up 12% to $3.383 billion and operating profit climbing 28% to $622 million on higher volumes and price gains.

Production & Precision Agriculture was the primary drag, with net sales declining 6% to $3.998 billion and operating profit falling 9% to $527 million, as lower shipment volumes and higher production costs offset favorable price realization. The company recorded tariff recoveries of $110 million in the quarter, primarily reflected in segment production costs. Financial Services net income rose 7% to $219 million, supported by favorable financing spreads.

"Deere delivered a strong quarter, reflecting disciplined execution by our teams and continued resilience across our portfolio," said Chairman and Chief Executive Officer John C. May. "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."

Guidance and Outlook

Deere raised its full-year fiscal 2026 net income guidance to a range of $4.75 billion to $5.00 billion. The company's industry outlook projects U.S. and Canada Large Ag equipment demand down 15% to 20%, Small Ag & Turf flat to up 5%, and South America tractors and combines down 15% to 20%. On the construction side, U.S. and Canada construction equipment is expected up 5% to 10%, compact construction equipment up approximately 5%, global roadbuilding up approximately 10%, and global forestry down approximately 10%. For its equipment segments, Deere projects Construction & Forestry net sales up approximately 20% and Small Ag & Turf net sales up approximately 15% for the full year, while Production & Precision Ag net sales are expected to fall approximately 10%.

May noted: "As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle. Across our business, early order program trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation."

Wall Street View

Analyst sentiment on Deere heading into the print was constructive, with the most recent consensus reflecting 15 Buy ratings and 13 Hold ratings, and no Sell recommendations. The Q3 beat and guidance raise provide concrete data points for analysts assessing whether the ag equipment cycle has troughed.

Investor Takeaway

The 84% jump in Construction & Forestry operating profit and the 28% rise in Small Ag & Turf operating profit illustrate that Deere's portfolio diversification is cushioning pressure in its large-ag segment during a cyclical trough. The raised full-year net income range of $4.75 billion to $5.00 billion, combined with management's characterization of 2026 as the cycle bottom supported by improving order books and used-equipment inventory trends, gives investors a clearer framework for timing a potential large-ag recovery in fiscal 2027 and beyond.