Full Breakdown
Deere Raises Lower End of 2026 Net-Income Outlook on Construction Demand
8/21/2026, 2:12:57 AM
Core Event: Forecast Lift and First Quarterly Profit Rise in Three Years
On August 20, 2026, Deere & Company announced that its full-year net-income outlook for fiscal 2026 has been raised to a range of $4.75 billion to $5.00 billion, up from the prior $4.5 billion-$5.0 billion range. The company also reported its first quarterly profit increase in three years, posting earnings of $5.10 per share for the quarter that ended in early August, above the consensus estimate of $4.70 per share.
Background & Context
Deere’s earnings were buoyed by a surge in demand for construction and forestry equipment, driven by U.S. government and private infrastructure spending and a rapid, AI-fuelled build-out of data-center capacity. At the same time, the traditional farm-equipment business continues to face a prolonged downturn caused by lower crop prices, higher input costs, and reduced farmer spending power.
Data & Statistics
- Net-income outlook: $4.75 billion–$5.00 billion (raised lower bound) – company release.
- Quarterly revenue: $11 billion, up 6 % year-over-year – company release.
- Earnings per share: $5.10, versus $4.75 a year earlier and $4.70 analyst estimate – company release.
- Construction & Forestry segment: sales +18 %; operating profit +84 % ($199 million contribution, 69 % of total profit increase) – company release.
- Small Ag & Turf segment: sales +12 %; operating profit +28 % – company release.
- Production & Precision Agriculture segment: sales –6 %; operating profit –9 % – company release.
- Tariff refund: $110 million recovered in the quarter; projected net tariff costs of about $750 million in 2026 and about $1 billion in 2027 – finance chief Brent Norwood.
Official Statements & Responses
- Brent Norwood, Chief Financial Officer: Norwood noted that the $110 million tariff refund offsets part of the expected $750 million net tariff expense for 2026, with larger costs anticipated in 2027.
Why It Matters / Impact
The construction-driven profit surge demonstrates how Deere’s diversified portfolio can offset weakness in its core agricultural segment. The raised outlook improves investor sentiment, with analysts noting that the higher floor narrows the valuation gap between Deere and peers such as CNH Industrial and AGCO. However, the company still projects double-digit sales declines in its primary farm-equipment markets, indicating that the agricultural recovery remains uncertain.
Verbatim Quotes
- “As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle,” — Deere CEO John May
*All figures and statements are drawn from Deere’s third-quarter 2026 release and accompanying analyst commentary.*
