Aug 20, 2026 earnings call — Tariff update and division demand trends
Deere raised fiscal 2026 net income outlook to 4.75 to 5 billion while forecasting 1.1 billion of direct tariff expense for the year.
Revenue $12.6B (est $10.8B) · EPS $5.10 (est $4.69)
Key quotes
"we have about 4 to 5 months of orders on hand, which is, quite frankly, a little more than we would want to have."
"factory adoption of See & Spray will nearly double with the technology included on about 1/3 of North American sprayers on order."
Analyst Q&A 13
Production vs retail and 2027 pricing
Q (Jamie Cook · Truist): How will production compare to retail by region in 2027? And what are the pricing expectations for the 2027 early order program given inflation concerns?
A: Management said PPA and construction & forestry will be modestly underproduced this year by a couple percentage points, driven by caution in South America and strong retail order positions. They also said EOP pricing was set months ago and their focus is on covering inflation across EOP products and the PPA portfolio toward 2027.
"And we have done that across the EOP products and also across all of the PPA portfolio as we roll towards 2027." — Deanna Kovar (PRESIDENT)
Tariff change and excavator launch
Q (Tami Zakaria · JPMorgan): What drove the tariff expectation change to $1.1 billion? And how is the excavator launch progressing and when will broader adoption occur?
A: They said the change from $1.2 billion to $1.1 billion is mainly due to Section 32 tariff changes, with the EU import rate moving from roughly 25% to 15% effective June 1, giving a partial-year benefit in 2026 and more tailwind in 2027. On excavators, they launched the first Deere-designed models this spring, have 3 models in the market with very positive customer feedback, and will roll out more models over the next 3 to 4 years.
"I think we have got 3 models in the market today." — T. Brent Norwood (CFO)
Inventory cadence and tractor inventory build
Q (Kristen Owen · Oppenheimer): Did something slip between 3Q and 4Q causing inventory changes, and why was tractor inventory built in 3Q ahead of industry?
A: They said not to read much into Q3 changes; shipment plans are set for the year and they pulled some demand into Q3 to manage Q4 risk, so there is no inventory concern. Factories are hitting forecasts, sold-ahead positions and retail pace in The Americas are on trend, and they expect to move through inventory as planned.
"I would not read too much into the recent changes here in Q3." — Christopher Seibert
Mix impact from technology on 2027
Q (Tim · Raymond James): How might higher technology sales and product mix affect 2027 results?
A: They said it is too early to tell given industry uncertainty, softness in EU and Brazil, and commodity volatility; mix will depend on how EOPs, combines and regional markets develop. They are encouraged by current signals but will watch variables like recovery in South America and construction growth.
"I think it is too early to tell but certainly encouraged by the signals we are seeing right now." — Christopher Seibert
Early order program regional demand and tech take rates
Q (Jerry Revich · Wells Fargo): Can you unpack EOP results by region and the moving pieces behind mid-single-digit growth and possible higher growth?
A: They said the EOPs are dynamic and still open for sprayers and planters; the US is trending slightly better than Canada but Canada is a small part of planters. They highlighted strong tech take rates — doubling of See & Spray on factory sprayers and 40% of planters taking advanced planting tech — as signs customers want yield and cost improvements.
"And seeing a doubling of See & Spray on factory installed sprayer orders and seeing 40% of our planters taking some of the most advanced technologies on planting really gives us confidence" — Deanna Kovar (PRESIDENT)
EOP order cadence and dealer choices
Q (David Raso · Evercore): What explains the cadence of EOP orders being up mid-single-digit—grain prices or tech choices?
A: They said cadence is as expected and they made tweaks to give dealers more choice, which performed as intended. They remain pleased with technology take rates and hope the mid-single-digit increase continues into the year.
"I think we have seen as expected cadence." — Deanna Kovar (PRESIDENT)
8R orders and European/Brazil demand
Q (Rob Wertheimer · Melius): Are 8R tractor orders in line with EOP trends, and how should we think about Europe and Brazil demand amid input stress?
A: They said 8R orders are as expected with 4 to 5 months order lead times and that the model year 2026 shipment schedule is closed. They noted commodity price moves are encouraging, Brazil uses a 3-month order book to manage volatility, Europe is mixed with challenges in arable but stable small ag and turf, and overall order pace is currently as expected.
"So we have orders for fourth quarter on hand, and you have seen us change our industry guide given the circumstances we see there." — Christopher Seibert
Construction & forestry order backlog and rental demand
Q (Stephen Volkmann · Jefferies): How are C&F early programs shaping up and how much is dealer rental fleet loading versus other demand?
A: They said C&F trends are very positive with about 4 to 5 months of orders on hand, more than the typical 2 to 3 months, driven by growing industry retails, large infrastructure and data center projects, independent rental channel participation, and dealer-owned rental fleets. Underproduction will create opportunity entering 2027 and they feel good about the CNF situation.
"We have about 4 to 5 months of orders on hand, which is, quite frankly, a little more than we would want to have." — Christopher Seibert
Tariff timing and 2027 headwind/ tailwind
Q (Steven Fisher · UBS): Is the partial-year tariff change a headwind or tailwind into 2027 and what refunds are in Q4?
A: They said net tariffs (direct tariffs paid less refunds) are a headwind into next year. For this year they expect to pay about $1.1 billion in direct tariffs less $382 million of refunds, and they expect a run rate closer to, or right around, $1 billion for fiscal year 2027, so tariff expense will step up next year versus this year.
"We will end up paying about $1.1 billion in direct tariffs this year less $382 million of refunds." — T. Brent Norwood (CFO)
C&F pricing dynamics and dealer rental strategy
Q (Chad Dillard · Bernstein): Why does C&F implied pricing fall from +8% in 3Q to lower guide, and are you targeting dealer rental fleet growth?
A: They said Q3 pricing benefited from an easy comp versus 2025 when C&F had about 5% negative price due to incentives, and Q4 has no outsized year-over-year comps so pricing is going well but not at the same level. On rental, they see opportunity to grow exposure via independent rental houses and dealer-owned fleets as rental has grown to about 30% to 35% of earthmoving transactions, which could help inventory fill into 2027.
"Today, anywhere from 30% to 35% of, you know, earthmoving transactions start as a rental." — T. Brent Norwood (CFO)
EOP incentives, margins and right-to-repair settlement
Q (Angel Castillo · Morgan Stanley): Are you offering incentives in EOPs and what do EOP/backlog imply for margins? Also, what does the FTC settlement mean for right-to-repair and life-cycle parts?
A: They said pricing decisions are measured; they are taking inflationary price over time and committed to cover inflation, with multiple pricing points through the year. On right-to-repair, they said John Deere has always supported customers' ability to repair or use third parties, and the agreement formalizes product and tool access (Operations Center, ProService) enabling diagnostics, manuals, and software updates for customers or independent service advisers, which they think supports their life-cycle solutions long term.
"John Deere Operations Center, ProService, enables our customers, if they choose to, you know, have access to diagnostic tools, digital manuals, and maybe most importantly, be able to do software updates on their own." — T. Brent Norwood (CFO)
Europe demand and CAP reform timing
Q (Mig Dobre · Baird): Will CAP budget changes in 2028 pull demand forward into 2027 or cause farmers to delay purchases in Europe? Any directional 2027 view?
A: They said it is too early to tell; Europe is just starting to collect orders for Q1 with 4 to 5 months order books, and demand will depend on input costs and commodity price trends which shape arable producers' sentiment, while dairy and livestock look fairly stable. They cannot yet say whether policy will pull demand forward or delay it.
Farmer positioning on input costs in Brazil and US
Q (Sabahat Khan · RBC): How are Brazilian and U.S. farmers positioning given input cost uncertainty and how might that affect their equipment decisions?
A: They said input price uncertainty exists everywhere and impacts differ by market; farmers are seeking alternatives in products and application amounts and staying nimble. Many large farmers have multiple years of inputs contracted, farmers remain focused on driving yield, and markets are reacting but farmers are generally resilient and open-minded about future bookings.
"Overall, I think markets are reacting. Farmers are staying nimble in considering how they might adjust their portfolios, but they still remain focused on driving yield and getting the best outcome they can." — Deanna Kovar (PRESIDENT)