The world’s largest farm machinery maker earlier cut factory output to cope with weak demand for new machinery, as lower crop prices and higher input costs prompted farmers to postpone major purchases.The company is also working closely with dealers across its network to reduce inventory.
It expects 2026 net profit to be between $4.5 billion and $5 billion, compared to its previous forecast of $4 billion to $4.75 billion. Analysts on average expect Deere to post a full-year net profit of $4.45 billion, according to data compiled by LSEG.
“We are encouraged by the continued recovery in demand across both the construction and small farming sectors,” said CEO John May.
“These positive developments reinforce our belief that 2026 represents the trough of the current cycle.” Deere now expects 2026 net sales in two segments – Small Agriculture & Turf and Construction & Forestry – to increase approximately 15% each, compared to its previous forecast of an increase of approximately 10%.
Oppenheimer analyst Kristen Owen said the company ended the quarter with relatively lean inventory, historically accruing fewer shares in the fourth and first quarters and leaving room for potential upside as inventories normalize over the year.
Deere posted net income of $656 million, or $2.42 per share, for the quarter, down from $869 million, or $3.19 per share, a year ago, but above analysts’ estimate of $2.05 per share.
First-quarter revenue rose 13% to $9.61 billion.
RATES ARE CLOSING, FARM INCOME REMAINS WEAK
U.S. President Donald Trump’s sweeping tariffs have hit Deere’s corporate profits. The Moline, Illinois-based company has faced higher tariff-driven production costs as it relies heavily on imported raw materials to produce its green and yellow tractors.
U.S. farmers are heading into another season of weak crop prices and higher costs, forcing tough decisions about how and whether to continue operating as ample grain supplies pressure markets.
The U.S. Department of Agriculture forecast earlier this month that net farm income — a broad measure of profitability in the agricultural economy — will decline 0.7% to $153.4 billion in 2026 from a year ago.
Deere expects a pre-tax rate increase of approximately $1.2 billion in fiscal year 2026.
#stocks #Deere #raises #fullyear #profit #forecast #construction #sector #sales #recover #shares #rise