Deere Posts $2.42 EPS in Q1 2026, Down 87% From Year-Ago Quarter

Deere & Company (NYSE: DE) reported sharply lower profits for its fiscal first quarter 2026, with earnings per share plummeting 87% from the prior year period as the agricultural equipment maker continues to navigate a downturn in farm equipment demand.

Key Numbers

The company posted earnings of $2.42 per share for the quarter ended January 31, 2026, down from $18.50 in fiscal 2025. This represents one of the steepest earnings declines in recent years for the Moline, Illinois-based manufacturer.

Revenue for the quarter came in at $9.61 billion, a significant decrease from the $45.68 billion reported for the full fiscal year 2025. When compared to the third quarter of fiscal 2025, which saw revenue of $12.02 billion, the current quarter shows a 20% sequential decline.

Net income told a similar story, falling to $660 million in Q1 2026 from $5.03 billion for the full year 2025. On a quarterly comparison basis, this represents an 83% year-over-year decline and a 49% drop from the $1.29 billion earned in Q3 2025.

The dramatic earnings compression reflects the cyclical nature of agricultural equipment demand. After several years of robust farm income driving strong equipment sales, farmers have pulled back on capital expenditures as commodity prices have moderated and input costs remain elevated. This has created significant headwinds for Deere's core agricultural equipment segment, which typically accounts for more than 70% of the company's total revenue.

What Management Said

While the company's 8-K filing did not include detailed management commentary beyond the announcement of an investor earnings call, the results presentation referenced in the filing (Exhibit 99.2) was made available to investors. The filing indicates that management conducted a comprehensive review of first-quarter performance during the earnings conference call on February 19, 2026.

The formal SEC filing, signed by Corporate Secretary Kellye L. Walker, confirms that the company has provided supplemental financial information alongside the earnings release. This suggests management is providing additional context to help investors understand the factors driving the significant year-over-year decline in profitability.

The timing of the earnings release, coming in mid-February for the quarter ended January 31, maintains Deere's typical reporting cadence and indicates the company continues to operate on its standard fiscal calendar despite the challenging operating environment.

What to Watch

Several key factors will determine Deere's trajectory through the remainder of fiscal 2026. First, the pace of inventory reduction at dealerships will be critical. If dealers continue to work down equipment stocks, it could further pressure near-term production volumes and margins.

Second, commodity prices and farm income trends will heavily influence farmers' willingness to invest in new equipment. Any stabilization or improvement in agricultural economics could help establish a floor for equipment demand.

Third, Deere's construction and forestry segment performance becomes increasingly important as agricultural markets soften. Infrastructure spending and housing construction activity could provide some offset to agricultural weakness.

The company's ability to manage costs while maintaining its dealer network and product development investments will be tested in this downcycle. Deere has historically demonstrated strong operational discipline during agricultural downturns, but the magnitude of the current earnings decline suggests this cycle may be particularly challenging.

Investors should also monitor the company's guidance updates in coming quarters. The absence of forward-looking statements in the current 8-K filing leaves uncertainty about management's expectations for the remainder of fiscal 2026. Any commentary on order trends, pricing dynamics, or market share shifts will be closely watched by the investment community.

The stark contrast between the current quarter's $2.42 EPS and the prior year's results underscores the cyclical volatility inherent in agricultural equipment manufacturing. While Deere remains the market leader with a strong balance sheet and global distribution network, the current results demonstrate that even industry leaders face significant profitability pressure when end-market demand weakens.

*Source: Deere & Company Form 8-K filed with the SEC on February 19, 2026*

— StockCliff Research