Summary
Deere & Company (DE) reported its fiscal second quarter 2026 results, indicating a 5% increase in net sales and revenues to $13,369 million compared to the prior year period, driven by higher sales volumes and favorable foreign currency translation. However, net income attributable to Deere & Company saw a slight decrease of 2% to $1,773 million. Diluted earnings per share also declined to $6.55 from $6.64 in the prior year. The company experienced a notable 39% decrease in operating profit for the Production & Precision Agriculture (PPA) segment, largely due to lower shipment volumes and increased production costs, including higher material and freight expenses. Conversely, the Small Agriculture & Turf (SAT) and Construction & Forestry (CF) segments demonstrated strong performance, with SAT's operating profit up 25% and CF's up 48%. The Financial Services segment reported an 11% increase in net income, driven by favorable financing spreads and derivative valuation adjustments, despite a decrease in revenue primarily due to the deconsolidation of Banco John Deere S.A. in the prior year. Looking ahead, Deere & Company anticipates net sales to increase in fiscal year 2026 compared to 2025, with improvements in CF and SAT expected to more than offset a decline in PPA sales. The company continues to focus on its "Leap Ambitions" strategy, emphasizing technology integration and Solutions as a Service. Despite inflationary pressures and ongoing global uncertainties, the company maintains access to global capital markets and expects to meet its funding needs.
Key Highlights
- 1Net sales and revenues increased 5% to $13,369 million for the quarter, and 8% to $22,981 million year-to-date, driven by higher volumes and currency translation.
- 2Net income attributable to Deere & Company decreased 2% to $1,773 million for the quarter and 9% to $2,429 million year-to-date.
- 3Production & Precision Agriculture (PPA) segment experienced a significant 39% decrease in operating profit due to lower shipment volumes and higher production costs.
- 4Small Agriculture & Turf (SAT) segment saw a 25% increase in operating profit, and Construction & Forestry (CF) segment reported a 48% increase, both driven by higher volumes and price realization.
- 5Financial Services segment's net income increased by 11%, aided by favorable financing spreads and derivative valuation adjustments.
- 6Inventories increased by $782 million year-to-date, primarily due to seasonal factors.
- 7The company repurchased $325 million of its common stock during the second quarter of 2026 under its ongoing share repurchase program.