Should You Run With Deere After Big Beat-and-Raise Quarter?

"Deere & Company ( ) reported first-quarter fiscal 2026 results yesterday that beat Wall Street expectations for both revenue and earnings even though profits fell from the year before. Equipment operations net sales hit $8 billion, a 17.5% jump from last year and well above the consensus range of roughly $7.59 billion to $7.92 billion. Earnings came in at $2.42 per share, down 24% from $3.19 a year earlier but topping analyst forecasts of about $2.02 to $2.11 per share."

"The Production & Precision Agriculture segment, which focuses on large-scale farm machinery like big tractors and combines, posted net sales up only 3% to $3.16 billion. Operating profit dropped sharply by 59% to $140 million, with margins shrinking to 4.4%. Factors like higher tariffs, a less favorable product mix, and rising warranty expenses added pressure. This mirrors continued softness in the big agriculture market, where high commodity prices and cautious farmers have kept demand for heavy equipment low."

"On the brighter side, the Small Agriculture & Turf segment did very well, too, with net sales rising 24% to $2.17 billion and operating profit climbing 58% to $196 million. Growth came from strong demand for compact tractors, mowers, and turf care equipment aimed at smaller farms and homeowners. The Construction & Forestry segment also stood out, with sales up 34% to $2.67 billion and operating profit more than doubling to $137 million."

Deere reported Q1 fiscal 2026 results with overall worldwide net sales and revenues of $9.6 billion, up 13%, and equipment operations net sales of $8 billion, up 17.5%. Earnings were $2.42 per share, down 24% year over year but above analyst forecasts. The company raised its full-year net income outlook to $4.5 billion–$5.0 billion from $4.0 billion–$4.75 billion. Segment performance diverged: Production & Precision Agriculture showed only 3% sales growth and a 59% operating profit decline, while Small Agriculture & Turf and Construction & Forestry posted strong double-digit sales and sizable profit gains.

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