Deere & Co. adjusted its annual profit outlook, now estimating net income for the fiscal year to be between $4.75 billion and $5 billion, an increase from its prior projection of $4.5 billion to $5 billion. This revised forecast is driven by a stabilizing agriculture sector, with a more significant rebound in farm machinery sales expected in 2027. Despite a prolonged slump in demand for large agricultural equipment, the company's third-quarter earnings of $5.10 per share surpassed analyst estimates of $4.70 per share, contributing to a 3.3% rise in premarket trading for its shares.
The improvement in Deere's financial outlook was also bolstered by strong performance in its construction and forestry segment, which experienced an 18% increase in net sales from the previous year. This growth is attributed to rising U.S. government and private infrastructure spending, alongside the expansion of AI-fueled data centers. The company also saw a 12% rise in net sales for its Small Ag & Turf segment, helped by better prices for milk and beef, while its main Production & Precision Agriculture segment, which includes large tractors, saw a 6% decline in revenue.
Deere's Chief Executive Officer, John May, stated that 2026 is expected to mark the bottom of the current agricultural equipment cycle. He expressed confidence in Deere's long-term value creation, citing early order program trends, improved used-equipment inventories, and increasing adoption of advanced technologies by customers. The company's quarterly profit was also aided by a $110 million tariff refund. While rival CNH Industrial NV raised its annual outlook, AGCO Corp. trimmed its estimates due to high input costs.
