Deere Beats Expectations in Q1 FY2026 – Despite Lower Profits

CMB News | Machinery & AgTech | February 2026

Deere & Company delivered a stronger-than-expected start to fiscal year 2026, posting solid revenue growth and an earnings beat in the first quarter. While net income declined year-on-year, the U.S. machinery giant raised its full-year profit guidance, triggering a positive market reaction.

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📊 Q1 FY2026 Highlights (Period Ended: February 1, 2026)

• Total Revenue: $9.61 bn (+13% YoY)

• Net Income: $656 m (vs. $869 m last year; –25% YoY)

• Earnings per Share (EPS): $2.42 (consensus: ~$2.02)

• Equipment Sales: approx. $8.0 bn (+18% YoY)

Despite lower year-over-year profitability, Deere exceeded analyst expectations on both revenue and EPS.

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🏗 Segment Performance: Construction Leads Growth

Deere’s diversified structure helped offset weakness in core agricultural machinery:

• Construction & Forestry: $2.67 bn revenue (+34% YoY)

• Small Agriculture & Turf: $2.17 bn (+24% YoY)

• Production & Precision Agriculture: $3.16 bn (+3% YoY)

The strongest growth came from construction equipment, while large-scale agriculture showed only modest expansion — reflecting ongoing pressure in the global farm income cycle.

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📈 Guidance Raised – Market Responds Positively

Deere increased its full-year FY2026 net income forecast to $4.5–5.0 bn, above the prior guidance range.

Investors reacted positively to the combination of:

• Revenue growth acceleration

• EPS outperformance

• Improved forward guidance

The stock posted notable gains following the earnings release.

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⛏ What It Means

Although quarterly net income fell compared to last year, Deere demonstrated:

1. Operational resilience in a mixed agricultural environment

2. Strong pricing and volume execution in construction equipment

3. Improved earnings visibility for the remainder of the fiscal year

Margin pressure remains evident, but management’s upward revision suggests confidence in improving demand conditions and cost control over the coming quarters.

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🔎 CMB Outlook

Deere’s results indicate that the global machinery cycle is stabilizing, with construction providing a counterbalance to softer agricultural demand. The raised earnings outlook supports the view that 2026 may mark the beginning of a renewed growth phase.

Key watchpoints for the next quarters:

• Farm income trends in North America

• Equipment order backlog development

• Margin trajectory across segments

• Impact of global commodity price dynamics

Bottom line:
Deere has delivered a revenue-driven earnings surprise and reinforced confidence in its FY2026 outlook — positioning itself well in a transitional industrial cycle.