Key Takeaways
- Third quarter earnings per share reached $5.10 for Deere, surpassing analyst expectations of $4.69 by $0.41
- Quarterly revenue totaled $12.61B, significantly exceeding the consensus forecast of $10.81B
- Premarket trading showed shares climbing 0.6% to reach $584
- Full-year 2026 net income projections upgraded to a range of $4.75B-$5B from the previous $4.5B-$5B estimate
- North American large-equipment sales projections adjusted downward, anticipating a 15%-20% decline
The agricultural machinery manufacturer delivered third quarter earnings of $5.10 per share, exceeding analyst projections of $4.69. Quarterly revenue reached $12.61 billion, substantially above the $10.81 billion Wall Street consensus. Premarket activity showed shares advancing 0.6% to $584.
Compared to the same period last year when Deere recorded EPS of $4.75 on approximately $7.3 billion in sales, this quarter’s agricultural equipment division alone generated roughly $7.4 billion. While the expansion remains measured, the trajectory points upward.
These figures surpassed expectations that were admittedly conservative. Agricultural producer revenues have faced sustained challenges, particularly with corn valuations significantly below peak levels. During early 2022, corn traded above $6 per bushel and reached beyond $8 at certain intervals. Such commodity strength typically fuels equipment purchases. Recent market conditions haven’t provided that catalyst.
The Downturn Timeline
Deere’s equipment revenue reached approximately $41 billion during fiscal 2023 at its zenith. The figure declined to $32 billion in fiscal 2024, then dropped further to $28 billion in fiscal 2025. Projections suggest fiscal 2026 will maintain the $28 billion level before an anticipated rebound toward $30 billion in fiscal 2027.
This backdrop transforms Thursday’s earnings victory into something closer to cautious optimism rather than triumph.
The company elevated its fiscal 2026 net income forecast to a band between $4.75 billion and $5 billion, representing an increase from the May guidance of $4.5 billion to $5 billion. That May projection had left investors underwhelmed, particularly since the company actually generated approximately $5 billion during fiscal 2025.
JPMorgan’s Tami Zakaria had warned before the earnings release that Brazilian and North American indicators were performing below Deere’s own projections. Her analysis proved accurate. The company reduced industry sales expectations across several markets.
Regional Forecasts Adjusted Lower
North American large-equipment sales continue to face projected declines of 15% to 20%. South American guidance received a slight downward revision to a 15%-20% drop from approximately 15% previously. European projections were lowered to flat growth from an earlier estimate of flat to up 5%.
These adjustments are creating margin pressure within Deere’s large agriculture machinery division.
Zakaria subsequently reduced her fiscal 2027 EPS projection to $20.49 from $22.81. The broader analyst consensus stands at $22.19 for 2027, compared to $18.08 anticipated for the current year.
Her rating remains Hold with a $570 price objective, observing that investor sentiment currently leans bearish.
The stock currently trades at approximately 27 times forward earnings. Three years prior, when agricultural conditions were more favorable, that valuation multiple hovered near 12 times.
Prior to Thursday’s session, DE shares had declined roughly 1% during the previous month while posting gains of approximately 19% over the trailing twelve months. Year-to-date performance entering this week showed an increase of around 31%.
InvestingPro assigns Deere’s Financial Health score a “fair performance” rating.
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