Deere Q3 2026 earnings: profit beats expectations as construction offsets farm weakness
Deere topped profit and revenue forecasts in fiscal Q3 2026, helped by strong construction-equipment demand, and raised its full-year outlook.
| Q3 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $5.10 | $4.84 | +5.5% |
| Revenue | $11.00B | $11.05B | -0.5% |
Key takeaways
- Earnings per share of $5.10 beat Wall Street’s forecast of about $4.84 and rose from $4.75 a year earlier — a rare year-over-year profit increase after a long farm-equipment downturn.
- Revenue came in close to analyst estimates. Growth was driven mainly by the Construction & Forestry business, where sales rose about 18% on demand from infrastructure, data-center and energy projects, while large farm-equipment sales stayed weak.
- Small Ag & Turf equipment sales rose about 12%, and that segment’s operating margin improved to 18.4%, helped by steadier demand from the dairy and livestock sectors.
- The company’s trailing 12-month operating margin near 19% and net profit margin near 10% show Deere is still converting sales into profit efficiently even while its core large-agriculture market stays soft.
- Trailing 12-month EPS is down roughly 15% from a year earlier, a reminder that the broader farm-equipment slump has weighed on full-year profitability even though this particular quarter improved.
- Deere raised the bottom of its full-year fiscal 2026 net income guidance to a range of $4.75 billion to $5.00 billion, up from a prior range starting at $4.5 billion, and lifted expected operating cash flow to $5.0-$5.5 billion.
- Management reiterated that it views 2026 as the bottom of the current agricultural equipment cycle, citing early order programs for planters and sprayers showing mid-single-digit growth as a sign of stabilization.
- Construction-equipment order backlogs are said to extend into fiscal 2027, which management pointed to as support for that segment’s strength continuing.
Q3 2026 in context
| Metric | Aug 2026 | Jul 2025 | Change |
|---|---|---|---|
| Revenue | $12.6B | $12.0B | +4.9% |
| Net income | $1.4B | $1.3B | +7.0% |
| Free cash flow | $1.9B | $2.6B | -25.2% |
| Diluted EPS | $5.10 | $4.75 | +7.4% |
| Net margin | 10.9% | 10.7% | +0.2 pts |
Figures for the quarter ended Aug 2026 and the quarter ended Jul 2025, as reported to the SEC.
How the stock took it
Deere & Co closed at $580.63 on Aug 19, 2026, the last session before the report, and at $647.47 on Aug 21, 2026, the first session after it — +11.5% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 36.6% | Trailing 12 months |
| Operating margin | 19.3% | Trailing 12 months |
| Net profit margin | 10.1% | Trailing 12 months |
| Pretax margin | 13.0% | Trailing 12 months |
| EPS | $17.65 | Trailing 12 months |
| Revenue growth (YoY) | 4.0% | Trailing 12 months |
| EPS growth (YoY) | -14.6% | Trailing 12 months |
| Return on equity | 18.3% | Trailing 12 months |
Sources: company report · earnings call