Deere Reports $1.379 Billion Third-Quarter Profit, Raises Low End of Fiscal-2026 Guidance to $4.75 Billion

A Profit Beat With Two Different Endings

Deere posted $1.379 billion in net income for the quarter ended August 2, up from $1.289 billion a year earlier^[1][3]. That's $5.10 a share, against $4.75 last year^[1][3]. Revenue rose 5%, to $12.608 billion^[1]. It was the company's first year-over-year quarterly profit gain in about three years^[18]. Shares opened up 3.59% on the news^[16].

But the money didn't come from tractors. It came from bulldozers, and from a court case about tariffs. Deere's construction and forestry division saw sales jump 18%, to $3.618 billion, while its operating profit nearly doubled, up 84% to $436 million^[1]. Meanwhile the company's biggest business, farm equipment, is still shrinking: Production and Precision Ag sales are on track to finish the year down about 10%^[1].

That split is the whole story. Two numbers, one company, moving in opposite directions — and how you write about them depends on which one you lead with.

The Bottom of What, Exactly

CEO John May's message hasn't changed: "2026 will mark the bottom of the current ag equipment cycle^[1]." That phrase is doing a lot of work, so it's worth unpacking.

Farm equipment sales move in long waves. When crop prices are high, farmers buy new combines. When prices fall, they stop, and dealers are left holding machines nobody wants. New sales don't pick up again until that backlog clears out. So when Deere says it sees a "bottom," it isn't predicting that crop prices will rise. It's predicting that the pileup of unsold machines is finally shrinking enough that new orders can start again.

There's a real number behind that claim. Deere says inventories of big tractors and combines in North America are down more than half from their mid-2024 peak, with used-equipment stockpiles falling too^[6]. The company also points to early order programs — the system where dealers commit months ahead of time to next season's planters and sprayers — running up mid-single digits^[6]. Deere needs farmers and dealers to believe the worst has passed, because that belief is what gets orders placed before the equipment is even built^[1][6].

Skeptics don't dispute those numbers. They dispute what Deere did with its own forecast. The company raised the bottom of its full-year profit range from $4.5 billion to $4.75 billion, but left the top exactly where it was, at $5 billion^[1][5]. Reuters described that as Deere lifting its forecast^[4]. Bloomberg, looking at the same move, called it a narrowing — because the ceiling didn't budge, and because Deere is now pointing to 2027, not 2026, for the actual farm recovery^[5]. Both descriptions are accurate. They're just describing different halves of the same range.

A Refund From a Case Deere Didn't Bring

Part of this quarter's strength has an unusual source: a lawsuit the company wasn't a plaintiff in. In February, the Supreme Court ruled 6-3, in a case called Learning Resources, Inc. v. Trump, that a federal emergency-powers law does not let a president impose open-ended tariffs^[11]. That ruling triggered refunds across corporate America, potentially totaling as much as $175 billion^[11].

Deere collected some of that money. It booked a $272 million tariff recovery in its fiscal second quarter, which added about 2.5 percentage points to its profit margin that quarter^[9][10]. On last week's earnings call, management laid out the fuller math: Deere expects to pay roughly $1.1 billion in direct tariffs this year, offset by $382 million in refunds, for a net cost of about $750 million^[6]. Next year, the company says, the bill rises again, to a run rate closer to $1 billion, because the refund pipeline is a one-time event while the remaining duties, imposed under different legal authorities, keep applying^[6].

That distinction matters for how you read the quarter. Manufacturing Dive framed the refund as Deere "reaping benefits" from the ruling^[9]. An equally accurate way to say it: a U.S. manufacturer is still paying about $750 million a year in taxes on its own imported parts and materials, and got some of that money back only because a court found the original tariff unlawful^[6][11]. Both readings describe the same $272 million.

The Customer Behind the Numbers

Deere's factories may have found a floor. Its customers haven't necessarily found the same one. The U.S. Department of Agriculture projects net farm income nationwide will come to $153.4 billion in 2026, down $1.2 billion, or 0.7%, from last year^[12]. That's a small decline — nearly flat, in dollar terms.

But look at where that income is coming from. About 30% of it is projected to be government farm payments in 2026, up from roughly 20% in 2025^[14]. In other words, farm income held up mostly because Washington sent more money, not because farmers sold more crops for more money. Meanwhile, U.S. tractor sales fell 10.9% in July compared with a year earlier, and combine sales fell 5.3%^[12]. Corn futures for December delivery sit near $4.64 a bushel and wheat near $5.48 — at or below what many Midwestern growers say it costs them to grow the crop^[19][12].

The American Farm Bureau Federation, a lobbying group for farm owners, has used USDA's own numbers to argue the downturn is deeper than it looks, which is also the group's case for more federal aid^[13]. That's a real incentive, and it doesn't make the underlying numbers wrong: even with the extra government support, a farmer looking at breakeven crop prices isn't an obvious buyer for a new $700,000 combine.

Same Press Release, Two Headlines

Deere's own release led with the profit figure and the "bottom of the cycle" quote; the guidance that its largest segment is still shrinking by about 10% sits several paragraphs down, in a table^[1]. That's not inaccurate. It's a choice about what goes first.

Coverage split along similar lines. 24/7 Wall St. led with a claim that revenue "beat" analyst estimates by 17%^[8] — a real number, but one measured against a low Wall Street forecast, not against last year's results, when revenue actually rose 5%^[1]. Farm Progress went further, headlining that Deere "sees an upturn in farm economy^[15]," which converts a company forecast into an observed fact — something USDA's own data, with income roughly flat and increasingly government-funded, doesn't independently confirm^[12][14].

None of these framings contradicts the underlying numbers. They just decide which number gets to represent the quarter: the profit beat, the unchanged ceiling, the tariff refund, or the customer still waiting on higher crop prices. Deere will give its next real answer on the question in the fall, when it issues guidance for fiscal 2027 — the year by which, on its own timeline, the farm recovery is now supposed to actually show up^[5][6].