John Deere’s large ag machinery business continues to face headwinds in its third quarter (Q3) 2026 amid volatility across the ag economy, offset by gain in its small ag and turf and construction business, the original equipment manufacturer (OEM) shared in financial earnings release.
For the quarter ending Aug. 2, Deere reported production and precision agriculture net sales of $3.998 billion, declining 6% from Q3 2025 on lower volume sales. However, Deere’s small agriculture and turf segment posted 3.383 billion in net sales and its construction and forestry business recorded $3.618 billion, growing 12% and 18% year-over-year, respectively.
Overall, Deere reported $1.379 billion in net income for Q3 2026, compared to $1.289 billion for the same quarter last year. Net income totaled $3.808 billion for the first nine months of 2026, compared to $3.962 billion year-over-year.
Despite the downturn in large ag machinery, Deere is experiencing growing interest and adoption of its agtech services, Deanna Kovar, president of worldwide agriculture and turf division, production and precision agriculture, and Americas and Australia, told analysts on an earnings call.
The OEM’s precision ag service See & Spray is on a third of the sprayers ordered in North America, nearly doubling adoption this year, Kovar explained. Similarly, more than 40% of model year planters already sold in North America include Deere’s ExactRate, ExactShot, and FurrowVision, precision ag capabilities.
All of these capabilities are supported by John Deere Operations Center, a digital farming platform that has “more than 520 million engaged acres across nearly 1.2 million connected machines,” Kovar said. This includes 190 million highly engaged acres, “representing double-digit growth for the year,” she added.
“We continue investing through the cycle in technologies that improve customer profitability across market conditions, with a focus on lowering costs, increasing productivity, and maximizing yields. Utilization and adoption continue to reinforce the value we bring with our precision technology portfolio. It also shows the importance of staying committed, particularly in a challenging farm economy,” Kovar elaborated.
John Deere expects ‘a measured recovery’ in 2027
For its full year results, Deere is “seeing modest improvements in order intake versus the prior year,” and “the collective orders for planters and sprayers are already higher than last year,” Kovar said. The tractor maker raised its full-year guidance to $4.75-5 billion in net income for fiscal year 2026, compared to an estimate of $4.5-5 billion from Q2 2026.
Per segments and regions, Deere expects the large ag industry to be down 15-20% in the U.S. and Canada, while small ag turf up 5%. Elsewhere, Europe and Asia ag sales are expected to be flat, while South America will be down 15-20%.
Looking to fiscal year 2027, Deere is expecting “a measured recovery rather than a sharp rebound in 2027,” as customer profitability improved on commodity prices, some input cost moderation, and positive livestock economics, Kovar said.
“As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle. Across our business, early order program 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,” said John May, chairman and CEO, in the earnings press release.
John Deere’s stock jumped 6.94% to close at $620.94 on the day of the Q3 2026 earnings release, boosted by growth in its construction business.
