Deere Q3 Earnings Beat, Raises 2026 Outlook

Deere & Company reported Deere Q3 earnings and raised and narrowed its fiscal 2026 net-income outlook after stronger sales in Construction & Forestry and Small Agriculture & Turf for the quarter ended Aug. 2, 2026.

Quarter Results and Outlook

The company said in a press release on Aug. 20, 2026, that net income attributable to Deere & Company for fiscal third quarter 2026 rose to $1.4 billion, or $5.10 a share, on worldwide net sales and revenues of $12.6 billion and equipment-operations net sales of $11 billion. The release also showed nine-month results with net income of $3.8 billion, earnings per share of $14.06, worldwide net sales of $35.6 billion, and equipment net sales of $30.8 billion. Deere raised and narrowed its full-year net-income guidance to a range of $4.75 billion to $5.0 billion and increased equipment-operations cash-flow guidance to $5.0 billion–$5.5 billion, maintaining an effective tax-rate outlook of 24% to 26%. Share repurchases in the first half of fiscal 2026 totaled $697 million, down from $1.1 billion a year earlier.

The Form 8-K filed on Aug. 20 detailed segment results and operating metrics. Production & Precision Agriculture net sales declined 6.0% year over year to $4.0 billion, mainly due to lower shipment volumes partially offset by favorable pricing and currency effects. Small Agriculture & Turf net sales rose 12.0% to $3.4 billion, with operating profit up 28.0% to $622 million and operating margin improving to 18.4% from 16.0%. Construction & Forestry net sales increased 18.0% to $3.6 billion, generating operating profit of $436 million and a 12.1% margin. Financial Services net income grew 7.0% to $219 million. Total operating profit reached about $1.9 billion, up 18.4% year over year, while operating expenses rose 3.0% to roughly $10.7 billion.

On the Aug. 20 earnings call, management highlighted improving inventory health and said equipment-operations operating margin was 14.4%, supported by tariff refunds. The company recognized $110 million of incremental tariff refunds in the quarter tied to Phase 2 IEPA approvals, bringing fiscal 2026 refunds to date to $382 million. Management expects direct tariff expense of about $1.1 billion for fiscal 2026 excluding refunds, down from a prior run rate of $1.2 billion. Executives noted ongoing weakness in large farm machinery, offset partially by strength in construction and small agriculture. These factors, along with inventory improvements and tariff refunds, underpinned the revised guidance and stronger near-term cash-flow forecast.

Segment Performance, Tariffs, and Capital Allocation

The segment mix shifted as strength in Construction & Forestry and Small Agriculture & Turf offset weakness in Production & Precision Agriculture. The company’s total operating profit rose 18.4% year over year to about $1.9 billion, with operating expenses increasing 3.0%. Equipment-operations operating margin stood at 14.4%.

Tariff-refund recoveries played a significant role in supporting margins. Deere recognized $110 million of incremental tariff refunds in the quarter related to Phase 2 IEPA approvals, totaling $382 million for fiscal 2026 so far. The expected direct tariff expense for the year is about $1.1 billion, down from $1.2 billion previously.

Share repurchases slowed to $697 million in the first half of fiscal 2026 from $1.1 billion a year earlier. Deere’s raised equipment-operations cash-flow guidance and narrowed full-year net-income outlook suggest stronger near-term cash generation. This combination of factors will influence future capital allocation decisions as the company manages a soft patch in large agricultural machinery alongside steadier demand in construction and small agriculture.