NEW YORK, May 21, 2026, 11:00 EDT
Deere & Co dropped 7.1% to $520.62 in late-morning trading Thursday. The farm and construction equipment company posted better-than-expected quarterly results but left its full-year profit outlook unchanged. That move left Deere shares worse off than the SPDR S&P 500 ETF, which was down 0.4%, and the Industrial Select Sector SPDR ETF, off 0.7%.
Deere is facing more than just a test of whether it can top a single quarter. The market wants proof that sluggish demand for big tractors and combines has hit its low, but Thursday’s numbers put fresh pressure on the large ag segment. Construction and smaller machines showed some recovery.
Deere posted net income of $1.773 billion for the fiscal second quarter, or $6.55 per share, compared with $1.804 billion, or $6.64 per share, in the same period last year. Earnings per share is profit divided by each diluted share. Worldwide net sales and revenue came in at $13.37 billion, up 5%. Equipment net sales totaled $11.78 billion. Analysts polled by LSEG and cited by Reuters were looking for $5.70 per share and net sales of $11.54 billion.
Deere Chairman and CEO John May said the quarter showed the “strength of our diversified portfolio.” He also cited “ongoing challenges” facing global agricultural markets. May said Deere plans to keep investing through the cycle and will “lean on disciplined operations and resilience.”
Deere’s split performance this quarter pushed the stock. The Production & Precision Agriculture unit—the company’s largest and most linked to big farming—saw sales fall 14% to $4.50 billion. Operating profit for that unit dropped 39%. Construction & Forestry sales jumped 29% to $3.79 billion. Sales in Small Agriculture & Turf rose 16% to $3.49 billion.
“Investors like the gains in construction, but they’re still waiting for the agriculture side to bounce back,” Oppenheimer analyst Kristen Owen said. She described the global view as a “mixed bag.” Reuters
Deere left its fiscal 2026 net income target unchanged at $4.5 billion to $5.0 billion. The company still sees a 15% to 20% drop this year in large ag equipment sales for the U.S. and Canada and expects South American tractor and combine demand to fall around 15%. Deere did lift its Construction & Forestry sales outlook, now seeing about 20% growth.
Deere is going a different way from some machinery peers. Reuters said Caterpillar and CNH Industrial have talked about stronger construction demand as dealers restock, but Deere shares dropped more than Caterpillar, CNH, or AGCO on Thursday, with ag concerns hanging over the stock.
A $272 million tariff refund was recorded in the quarter after U.S. Customs and Border Protection accepted claims following a Supreme Court ruling that threw out tariffs imposed under the International Emergency Economic Powers Act. The refund supported reported results. The profit target for the year stayed the same.
But the risk cuts both ways. Crop prices could recover faster, financing could get cheaper or equipment orders could hold up, making Deere’s steady guidance look conservative. On the downside, farmers might keep holding off on buying, expenses could stay high, trade policy might stay hazy, or legal questions around repair limits could get louder. Deere listed farm cycle swings, input costs, rates, trade policy and right-to-repair lawsuits as risks. Manufacturing Dive said this week that Deere faces a new class-action lawsuit over repair rules for its lawn, turf and construction gear.
Deere’s earnings beat is getting less traction than the weak farm cycle. Right now, the stock’s direction looks tied more to whether large ag demand stays soft or finds a floor than to any construction segment strength.
