Deere & Company’s Construction & Forestry business significantly outpaced overall growth in the fiscal third quarter of 2026, with operating profit jumping 84% as pricing and higher shipment volumes drove major margin expansion.
Construction & Forestry net sales increased 18% to $3.618 billion from $3.059 billion a year earlier.
Operating profit surged to $436 million from $237 million, an increase of 84%, while operating margin expanded to 12.1% from 7.7%. That represents an improvement of 440 basis points.
Deere attributed the higher sales primarily to increased shipment volumes and favorable price realization. Operating profit benefited particularly from favorable pricing, although higher selling, administrative and general expenses and R&D costs provided a partial offset.
The strong Construction & Forestry performance helped compensate for continued weakness in large agricultural equipment.
Production & Precision Agriculture sales fell 6% to $3.998 billion, while operating profit declined 9% to $527 million. Its operating margin slipped to 13.2% from 13.6%.
Small Agriculture & Turf performed much better, with sales increasing 12% to $3.383 billion and operating profit rising 28% to $622 million. Operating margin increased to 18.4% from 16%.
Overall Deere net sales and revenue increased 5% to $12.608 billion, while net income increased 7% to $1.379 billion. Diluted EPS increased to $5.10 from $4.75.
The quarter also included $110 million of tariff recoveries. For the first nine months of fiscal 2026, Deere recorded $382 million of tariff recoveries.
Deere raised its fiscal 2026 net income forecast to between $4.75 billion and $5 billion.
Management continues to view 2026 as the bottom of the current agricultural equipment cycle, citing early-order trends and improving used-equipment inventories.
KEY QUOTE:
“We continue to believe 2026 will mark the bottom of the current ag equipment cycle.”
John C. May, Chairman and CEO of Deere & Company
