01—Abstract
Summary
Summary of the 8-K filed August 20, 2026. Cited figures are marked; the original filing is the authoritative source.
Deere & Company reported third-quarter fiscal 2026 net income attributable to the company of $1.379 billiona, or $5.10 per diluted share, up 7% from $1.289 billion, or $4.75 per share, a year earlier.
Total net sales and revenues rose 5% to $12.608 billionb. Results were driven by Construction & Forestry (net sales up 18%, operating profit up 84%) and Small Agriculture & Turf (net sales up 12%, operating profit up 28%), which offset a 9% decline in Production & Precision Agriculture operating profit. For the first nine months, net income fell 4% to $3.808 billion, or $14.06 per share, because Production & Precision Agriculture operating profit dropped 34%.
Tariff recoveries of $110 millionc in the quarter and $382 million year to date also helped results. Management raised or reaffirmed its fiscal 2026 net income forecast to a range of $4.75 billion to $5.00 billion, and the release describes the guidance as improved. The forecast calls for Production & Precision Agriculture net sales to fall about 10% with operating margin of 11-12%, down from 15.4% in fiscal 2025.
Small Agriculture & Turf net sales are expected to rise about 15%d, and Construction & Forestry net sales about 20%. Industry outlooks are weak for large ag in the U.S. and Canada (down 15-20%) and South American tractors and combines (down 15-20%). Management maintains its view that 2026 marks the bottom of the current agricultural equipment cycle.
Balance sheet and cash flow data show a larger receivables build and higher total borrowings, with consolidated short-term borrowings rising to $17.1 billion from $13.8 billion at fiscal year-end 2025. Equipment operations generated $4.0 billion of operating cash flow in the first nine months, and the company guided to $5.0-5.5 billion for the full year.
Share repurchases totaled $697 million year to date, down from $1.136 billion a year earlier. The next earnings call is scheduled for November 25, 2026.
02—Key points
Key Highlights
- Q3 FY2026 net income rose 7% to $1.379 billion ($5.10 per diluted share vs. $4.75), while total net sales and revenues increased 5% to $12.608 billion.
- Nine-month net income declined 4% to $3.808 billion ($14.06 per share), reflecting a 34% drop in Production & Precision Agriculture operating profit year to date.
- Construction & Forestry was the standout segment: Q3 net sales up 18% to $3.618 billion and operating profit up 84% to $436 million (12.1% margin, vs. 7.7%).
- Small Agriculture & Turf Q3 operating profit rose 28% to $622 million on 12% higher sales, with margin expanding to 18.4% from 16.0%.
- Production & Precision Agriculture Q3 net sales fell 6% to $3.998 billion and operating profit fell 9% to $527 million; full-year fiscal 2026 margin is forecast at 11-12% vs. 15.4% in fiscal 2025.
- Fiscal 2026 net income guidance is $4.75-5.00 billion; the release describes this as an improvement and management reiterated that 2026 should mark the cycle bottom.
- Tariff recoveries of $110 million in Q3 and $382 million year to date helped results, and Financial Services net income rose 7% to $219 million in the quarter, though full-year Financial Services net income is forecast at about $870 million vs. $890 million in fiscal 2025.
03—Questions
Frequently Asked Questions
Why did net income rise in the third quarter while Production & Precision Agriculture profit fell?
Growth came mainly from Construction & Forestry, where operating profit nearly doubled on favorable price realization, and from Small Agriculture & Turf, where higher shipment volumes and pricing lifted operating profit 28%. These gains more than offset a 9% decline in Production & Precision Agriculture, which was hurt by lower shipment volumes and higher production costs.
What does the fiscal 2026 outlook imply for the rest of the year?
Management forecasts net income of $4.75-5.00 billion for fiscal 2026. Based on nine-month net income of $3.808 billion, this implies a fourth-quarter contribution of roughly $0.9-1.2 billion. The forecast assumes large ag markets in the U.S. and Canada decline 15-20%, while small ag and turf and construction markets grow, with Construction & Forestry net sales up about 20% for the year.
Are tariffs still affecting Deere's results?
Yes, the filing references ongoing trade and tariff uncertainty as a risk factor. The company recorded tariff recoveries of $110 million in Q3 and $382 million for the first nine months, which were included in production costs and supported margins. Investors should watch whether these recoveries continue, because the filing does not say whether they will recur.
How is the balance sheet and cash generation trending?
Consolidated short-term borrowings rose to $17.1 billion from $13.8 billion at fiscal year-end 2025, and receivables increased, which lowered nine-month operating cash flow to $3.25 billion from $3.46 billion. Equipment operations generated $4.0 billion of operating cash flow, and full-year guidance is $5.0-5.5 billion. Share repurchases slowed to $697 million from $1.136 billion, while the quarterly dividend stayed at $1.62 per share.
What should investors watch next?
Key items include whether the Production & Precision Agriculture margin decline stabilizes as the forecast implies, whether large ag order trends improve as management expects, and whether Construction & Forestry pricing and volume gains hold. The fourth-quarter earnings call is scheduled for November 25, 2026, and will provide the first look at fiscal 2027 trends.
04—Continue