Deere Earnings Surpass Estimate in Q1, Sales Increase Y/Y

Deere & Company DE has reported first-quarter fiscal 2026 (ended Feb. 1, 2026) earnings of $2.42 per share, beating the Zacks Consensus Estimate of $1.92. However, the bottom line fell 24% from the prior-year quarter.

Net sales of equipment operations (comprising Agriculture, and Turf, Construction and Forestry) were $8 billion, up 17.5% from the prior-year quarter. Revenues beat the Zacks Consensus Estimate of $7.6 billion. Total net sales (including financial services and others) were $9.61 billion, up 13% from the year-earlier quarter. The upside was driven by higher shipment volumes, partially offset by higher tariffs.

Deere’s Profits Decline in Q1

The cost of sales in the reported quarter grew 24.7% from the prior-year quarter to $6.28 billion. Total gross profit in the reported quarter fell 2.9% from the prior-year quarter to $1.72 billion. Selling, administrative and general expenses (SA&G) were unchanged year over year at $972 million.

Total operating profit (including financial services) fell 3% from the prior-year quarter to $773 million in the fiscal first quarter.

DE’s Segmental Performances in Q1

The Production & Precision Agriculture segment’s sales grew 3% from the prior-year quarter to $3.16 billion due to favorable foreign currency translation. The operating profit in the segment declined 59% from the prior-year quarter to $139 million. The downside was led by higher tariffs, unfavorable sales mix and higher warranty expenses.

Small Agriculture & Turf sales were up 24% year over year at $2.17 billion on higher shipment volumes and favorable foreign currency translation. Operating profit improved 58% year over year to $196 million. 

Construction & Forestry sales were $2.67 billion, up 34% year over year. Operating profit surged 111% year over year to $137 million. The upside was due to higher shipment volumes, sales mix and production efficiencies, offset by higher tariffs. 

Revenues in Deere’s Financial Services division were $1.38 million in the reported quarter, down 6% year over year. The segment’s operating income was $301 million in the quarter under review, up from $266 million in the prior-year comparable quarter. 

Net income for Financial Services improved 6% year over year to $244 million in the first quarter of fiscal 2026.

Deere’s Q1 Cash & Debt Position

DE reported cash and cash equivalents of $6.8 billion at the end of the first quarter of fiscal 2026 compared with $8.2 billion at the end of fiscal 2025. Cash used in operating activities was $0.89 billion in the first quarter of fiscal 2026 compared with an outflow of $1.13 billion in the prior-year quarter.

DE’s Other Updates

On Feb. 17, 2026, the company announced that it acquired the intellectual property and related assets for tree planting equipment from a Finland-based equipment manufacturing company, Risutec Oy. This deal will boost Deere’s silviculture strategy, along with providing customers involved in reforestation with solutions for sustainable forestry.

Deere’s 2026 Guidance

Deere expects net income for fiscal 2026 between $4.5 billion and $5 billion, increased from the prior stated $4.00-$4.75 billion.

Net sales for Production & Precision Agriculture are expected to decrease 5-10% year over year. Sales of Small Agriculture & Turf are expected to rise 15%. Sales of Construction & Forestry are projected to increase 15%. The Financial Services segment’s net income is expected to be $840 million.

DE’s Share Price Performance

The company’s shares have gained 18.1% in the past year compared with the industry’s 16.2% growth.

Deere Stock’s Zacks Rank

Deere currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Farm Equipment Stocks

Lindsay Corporation LNN delivered earnings per share of $1.54 in first-quarter fiscal 2026, beating the Zacks Consensus Estimate of $1.46. Lindsay’s bottom line decreased 2% year over year.

Lindsay generated sales of $156 million, down from $166 million in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $168 million.

AGCO Corp. AGCO delivered an adjusted EPS of $2.17 in fourth-quarter 2025 compared with the prior-year quarter’s $1.97. The reported figure topped the Zacks Consensus Estimate of $1.85.

AGCO sales increased 1.1% year over year to $2.92 billion in the December-end quarter. The top line beat the Zacks Consensus Estimate of $2.68 billion. Excluding the favorable currency-translation impacts of 6.4%, AGCO’s revenues fell 5.3% year over year.

CNH Industrial CNH reported fourth-quarter 2025 adjusted earnings per share of 19 cents, up from 15 cents in the prior-year quarter. The figure also beat the Zacks Consensus Estimate of 11 cents.

CNH Industrial’s sales rose 5.8% from the year-ago level to $5.16 billion and topped the Zacks Consensus Estimate of $5.02 billion. The company’s net sales from industrial activities were $4.45 billion, up 8% year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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