DE · Earnings call · 2026Q3T · Full report
Guidance and Outlook
DEERE & CO · 2026-08-20 · Importance 85 · Surprise 76 · In source text
Deere raised fiscal 2026 net income guidance to $4.75 billion-$5 billion and equipment-operation cash flow guidance to $5 billion-$5.5 billion, while maintaining an effective tax-rate range of 24% to 26%. Production and Precision Ag sales are expected to decline approximately 10%, with an operating margin of 11% to 12%; Small Ag and Turf sales are expected to rise approximately 15%, with a margin of 14.5% to 15.5%. Construction and Forestry sales guidance remains approximately 20% growth, with a 10.5%-11.5% operating-margin range, and Financial Services net income guidance increased to $870 million. Management believes fiscal 2026 is the bottom of the agricultural equipment cycle and expects a measured, regionally variable recovery in 2027, supported by healthier inventories and improving farm fundamentals.
Key facts
- Small Ag and Turf full-year net sales are expected to be up approximately 15% and include 1.5 points of positive price realization and roughly half a point of favorable currency translation.
- Production and Precision Ag full-year net sales are now expected to be down approximately 10% for the year.
- Financial Services full year outlook increased to $870 million for fiscal 2026.
- Fiscal year 2026 net income outlook was raised to a range of $4.75 billion to $5.0 billion.
- Cash flow expectations from the equipment operation improved to a range of $5 to $5.5 billion for fiscal 2026.
- Construction and Forestry 2026 net sales forecast remained steady at up approximately 20% for the full year and includes 3 points of favorable price realization and approximately 1.5 points of favorable currency translation.
- MoveAgro financing program plus modest improvements in interest rates should improve access to capital for South America and help equipment investment into 2027.
- Fiscal guidance continues to reflect an effective tax rate between 24% and 26%.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| revenue | positive | committed | — | Small Ag and Turf full-year net sales are expected to be up approximately 15% and include 1.5 points of positive price realization and… |
| revenue | negative | committed | — | Production and Precision Ag full-year net sales are now expected to be down approximately 10% for the year. |
| revenue | positive | committed | — | Financial Services full year outlook increased to $870 million for fiscal 2026. |
| net_income | positive | committed | — | Fiscal year 2026 net income outlook was raised to a range of $4.75 billion to $5.0 billion. |
| cash | positive | committed | — | Cash flow expectations from the equipment operation improved to a range of $5 to $5.5 billion for fiscal 2026. |
| revenue | positive | committed | — | Construction and Forestry 2026 net sales forecast remained steady at up approximately 20% for the full year and includes 3 points of… |
| revenue | positive | probable | — | MoveAgro financing program plus modest improvements in interest rates should improve access to capital for South America and help… |