Deere (DE) Stock Falls After Q2 Beat as Flat Farm Income Spooks Investors

TLDR

• Deere reported Q2 EPS of $6.55 on $11.8B in equipment sales, beating Wall Street’s estimate of $5.70 EPS
• Total revenue hit $13.37B, up 5% year over year, driven by a 29% surge in construction and forestry sales
• The large agriculture segment dropped 14% YoY to $4.5B, with operating profit falling 39%
• Full-year net income guidance held at $4.5B–$5B; construction growth target raised to ~20%
• DE stock slid ~3.2% in premarket to $542, despite the earnings beat

Deere (DE) stock fell about 3.2% in premarket trading on Thursday, dropping to $542, even after the company posted better-than-expected second-quarter results.

Deere & Company, DE

The agriculture and construction equipment maker reported earnings per share of $6.55 for the quarter ended May 3, 2026. That topped the Wall Street consensus of $5.70 per share. Total revenue came in at $13.37 billion, up 5% from a year ago and ahead of the $12.73 billion analysts had expected.

Net income for the quarter was $1.77 billion, compared to $1.8 billion a year earlier.

The beat didn’t calm nerves. Investors remain uncertain about the farming outlook, and the stock’s reaction reflected that tension.

The numbers were propped up by a strong showing in construction and forestry, where net sales jumped 29% to $3.79 billion. Operating profit in that segment surged 48% to $561 million, driven by higher shipment volumes and better pricing.

Small agriculture and turf also held up, posting a 16% revenue increase to $3.49 billion, with operating profit up 25%.

Large Ag Drags on Results

The weak spot was Deere’s biggest segment. Production and precision agriculture — its large farming equipment business — saw revenue fall 14% to $4.5 billion. Operating profit dropped 39% to $706 million as lower volumes and rising production costs hit margins.

Deere projects industry-wide volumes in large agriculture to fall 15% to 20% for the full fiscal year.

Farmers are caught in a tough spot. Fertilizer prices have climbed following the war with Iran, since much of it is derived from oil and natural gas. Benchmark corn prices have ticked up to around $4.70 per bushel from $4.40 at end of 2025, but that hasn’t been enough to offset rising costs.

USDA data puts aggregate U.S. farm income at around $153 billion for 2026 — flat with 2025 and well below the $182 billion record set in 2022. Flat income doesn’t inspire big equipment purchases.

Guidance and Peers

Deere held its full-year net income guidance at $4.5 billion to $5 billion. It raised its construction and forestry sales growth target to roughly 20%, up from the prior 15% estimate. Projections for small agriculture growth (~15%) and large agriculture decline (5%–10%) were left unchanged.

CEO John May pointed to the company’s diversified portfolio as a buffer against sector-specific pressure.

The stock had been under pressure heading into the print. DE was down about 11% since the Iran conflict began, which pushed oil prices higher and squeezed input costs for farmers.

Peers AGCO and CNH had already reported March-quarter numbers. AGCO beat estimates and raised guidance — its stock fell 5.6%. CNH also beat and maintained guidance — its stock rose 6.3%.

In February 2026, Deere closed its $439 million acquisition of Tenna LLC, a construction equipment tracking company now folded into the construction and forestry segment.

Option markets had priced in a roughly 5% move in either direction following earnings.

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