Deere & Co.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 21 May 2026: press release. Guidance figures: 4 raised, 5 lowered, 11 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net income and EPS eased slightly: Second-quarter net income was $1.773 billion, down 2 percent from $1.804 billion a year earlier; diluted EPS was $6.55 against $6.64. Source
• Production & Precision Ag profit fell: Production & Precision Ag net sales fell 14 percent to $4.503 billion; operating profit was $706 million, down 39 percent, with margin at 15.7 percent against 22.0 percent. Source
• Construction & Forestry sales up 29%: Construction & Forestry net sales rose 29 percent to $3.790 billion; operating profit rose 48 percent to $561 million, with margin at 14.8 percent against 12.9 percent. Source
• Tariff refund recovered $272 million: After the February 20, 2026 Supreme Court decision invalidating IEEPA tariffs, the company recorded a $272 million recovery for accepted refund claims. Source
• South America forecast cut sharply: South America tractor and combine industry is now forecast down about 15 percent for fiscal 2026, from down about 5 percent in the prior release. Source
• Net income forecast held: Fiscal 2026 net income forecast kept at $4.5 billion to $5.0 billion, which the release describes as maintained amid market volatility. Source
• Construction & Forestry forecast raised: Construction & Forestry net sales forecast raised to up about 20 percent from up about 15 percent; currency at +2.0 percent and price at about +2.5 percent are unchanged. Source

“Our performance in the current market environment demonstrates the strength of our diversified portfolio.”

John May, chairman and CEO of John Deere

Guidance

What changed from last quarter

• Guidance kept: Fiscal 2026 net income guidance maintained at $4.5 billion to $5.0 billion, as the release states. Source
• Guidance raised: Construction & Forestry net sales forecast raised to up about 20 percent from up about 15 percent. Source
• Guidance raised: Financial Services net income forecast raised to about $860 million from about $840 million. Source
• Guidance lowered: Small Ag & Turf currency assumption cut to +1.0 percent from +2.0 percent, and price realization cut to about +1.5 percent from about +2.0 percent. Source
• Guidance lowered: Production & Precision Ag price realization assumption cut to about +1.0 percent from about +1.5 percent. Source
• Guidance lowered: South America tractor and combine industry forecast moved to down about 15 percent from down about 5 percent. Source
• Guidance lowered: Global forestry industry forecast moved to down about 5 percent from flat. Source
• Guidance raised: Global roadbuilding industry forecast raised to up about 10 percent from up about 5 percent. Source
• Guidance raised: Asia industry forecast narrowed to flat from flat to down 5 percent. Source
• New: Company recorded a $272 million recovery for accepted IEEPA tariff refund claims, after the Supreme Court invalidated the tariffs on February 20, 2026. Source
• New: In February 2026 the company acquired Tenna LLC, a U.S. construction technology company, assigned to the Construction & Forestry segment. Source

Quarter results and growth drivers

• Net income and EPS eased slightly: Second-quarter net income was $1.773 billion, down 2 percent from $1.804 billion a year earlier; diluted EPS was $6.55 against $6.64. Source
• Revenue rose five percent: Net sales and revenues rose 5 percent to $13.369 billion in the quarter; net sales were $11.778 billion against $11.171 billion. Source
• Six-month profit fell nine percent: Six-month net income was $2.429 billion, or $8.97 per share, down from $2.673 billion, or $9.82 per share; the company said the prior period was affected by special items. Source
• Investment in new products continues: Management said continued investment in new products and technology supports long-term growth and value creation. Source

Segment results

• Production & Precision Ag profit fell: Production & Precision Ag net sales fell 14 percent to $4.503 billion; operating profit was $706 million, down 39 percent, with margin at 15.7 percent against 22.0 percent. Source
• Lower shipments drove Ag decline: Production & Precision Agriculture sales fell on lower shipment volumes, partly offset by currency translation; operating profit fell on lower volumes and higher production costs. Source
• Small Ag & Turf profit rose 25 percent: Small Ag & Turf net sales rose 16 percent to $3.485 billion; operating profit rose 25 percent to $719 million, with margin at 20.6 percent against 19.2 percent. Source
• Construction & Forestry sales up 29%: Construction & Forestry net sales rose 29 percent to $3.790 billion; operating profit rose 48 percent to $561 million, with margin at 14.8 percent against 12.9 percent. Source
• Financial Services income up 18 percent: Financial Services net income rose 18 percent to $190 million on favorable financing spreads and favorable derivative valuation adjustments, partly offset by a lower average portfolio. Source

“As we address ongoing challenges within global agricultural markets, our comprehensive portfolio continues to drive market share expansion and support our targets for sustained growth.”

John May, chairman and CEO of John Deere

Tariff refund, costs and tax

• Tariff refund recovered $272 million: After the February 20, 2026 Supreme Court decision invalidating IEEPA tariffs, the company recorded a $272 million recovery for accepted refund claims. Source
• Tariff costs sit in production costs: The tariff impact for each segment is primarily included in the production costs category. Source
• Six-month tax provision rose 26 percent: Six-month provision for income taxes was $714 million against $566 million; the prior-year first quarter included discrete tax benefits. Source

Industry forecast and demand

• South America forecast cut sharply: South America tractor and combine industry is now forecast down about 15 percent for fiscal 2026, from down about 5 percent in the prior release. Source
• Large ag industry forecast down: U.S. and Canada large ag industry is forecast down 15 to 20 percent for fiscal 2026, unchanged; small ag and turf is forecast flat to up 5 percent. Source
• Forestry and roadbuilding forecasts moved: Global forestry is forecast down about 5 percent, from flat; global roadbuilding is forecast up about 10 percent, from up about 5 percent. Source

“By continuing to invest in innovation through the cycle and leveraging the strength of our dealer network, we are well positioned to deliver increasing value for customers and shareholders as market conditions improve.”

John May, chairman and CEO of John Deere

Fiscal 2026 guidance

• Net income forecast held: Fiscal 2026 net income forecast kept at $4.5 billion to $5.0 billion, which the release describes as maintained amid market volatility. Source
• Construction & Forestry forecast raised: Construction & Forestry net sales forecast raised to up about 20 percent from up about 15 percent; currency at +2.0 percent and price at about +2.5 percent are unchanged. Source
• Financial Services forecast raised: Financial Services fiscal 2026 net income is forecast at about $860 million, up from about $840 million. Source
• Small Ag & Turf assumptions lowered: Small Ag & Turf currency assumption cut to +1.0 percent from +2.0 percent and price realization to about +1.5 percent from about +2.0 percent; net sales still up about 15 percent. Source

Cash and shareholder returns

• Operating cash flow higher: Net cash provided by operating activities was $1.042 billion for the six months, against $568 million a year earlier. Source
• Buybacks lower, dividends paid higher: Share repurchases were $500 million for the six months against $838 million; dividends paid were $878 million against $843 million. Source
• Quarterly dividend held at $1.62: Dividends declared were $1.62 per share in each quarter and $3.24 for the six months, the same as the prior year's declared amount. Source
• Capital spending lower: Purchases of property and equipment were $451 million for the six months, against $555 million a year earlier. Source

Coming up, as management said on 21 May 2026

• Value expected as markets improve: Management said the company is well positioned to deliver increasing value for customers and shareholders as market conditions improve. Source

Risks management discussed

• Demand: Management cited ongoing challenges facing customers and global agricultural markets. Source
• Operational: Higher production costs reduced Production & Precision Ag operating profit alongside lower shipment volumes. Source
• Regulatory: Tariff impact is included in production costs for each segment. Source
• External: Management referred to market volatility when maintaining fiscal 2026 net income guidance. Source

Earlier plans management reported on

• Not stated: Management maintained the fiscal 2026 net income forecast from the prior release. Source
• Not stated: Management said its portfolio continues to support the company's existing targets for sustained growth. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.