John Deere has raised its full-year profit forecast and said it believes 2026 will mark the bottom of the agricultural equipment downturn, despite another fall in quarterly sales of its large-farm machinery.
The US manufacturer reported third-quarter net income of $1.379bn, up 7% on the same period last year, and lifted its forecast for full-year net income to between $4.75bn and $5bn.
However, its Production & Precision Agriculture division – which includes larger-scale farm machinery – saw third-quarter sales fall 6% to $3.998bn. Operating profit in the division fell 9% to $527m as lower shipment volumes, a weaker sales mix and higher production costs outweighed benefits from pricing and currency movements.
More News
-
John Deere named leading UK employer of armed forces veterans
-
Deere agrees $99m deal in right to repair lawsuit by US farmers
John Deere chairman and chief executive John C May said the company was seeing signs that the machinery cycle was approaching a turning point.
“As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle,” he said. “Across our business, early order programme trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation.”
For the first nine months of Deere’s financial year, Production & Precision Agriculture sales were down 7% to $11.664bn, while operating profit fell 34% to $1.372bn.
The company’s current outlook still points to a difficult year for major machinery demand. Deere forecasts that the large-agriculture market in the US and Canada will fall by 15% to 20% in 2026, while tractor and combine sales in South America are expected to decline by the same margin. Its forecast for Europe is flat.
Deere expects full-year net sales in its Production & Precision Agriculture division to decline by around 10%, although it anticipates a 2.5% benefit from currency translation and about 1% from higher realised prices.
The stronger group result was instead underpinned by its smaller machinery, turf and construction businesses. Small Agriculture & Turf sales increased 12% in the quarter to $3.383bn, with operating profit up 28% to $622m. Construction & Forestry sales climbed 18% to $3.618bn and operating profit rose 84% to $436m.
Worldwide net sales and revenues increased 5% to $12.608bn during the quarter ended August 2. Net income for the first nine months was still 4% behind last year at $3.808bn, despite revenue rising 7% to $35.589bn.
Deere said it recorded $110m of tariff recoveries in the third quarter and $382m over the first nine months, with tariff effects largely reflected in production costs. It also highlighted uncertainty around trade policy, tariffs, farm income, commodity prices, interest rates and global economic conditions among the risks facing demand for equipment.
Share