Original equipment manufacturer (OEM) John Deere started its 2026 fiscal year off strong, raising its full-year guidance, as gains in its small ag and turf and construction and forestry units offset challenges to its production and precision business, as shared in its first quarter (Q1) 2026 fiscal results, ending Feb. 1.
“Our results reflect the strength and resilience of a diversified portfolio, spanning multiple end markets and geographies. All business segments delivered higher net sales year-over-year, with both small ag and turf and construction [and] forestry top-line growing by over 20%,” Christopher Seibert, investor communications for John Deere, shared during the Q1 earnings call.
He added, “Our results for the quarter exceeded our forecast, driven by shipping volumes that were ahead of our initial plan. Importantly, over the course of the quarter, we saw contingent strengthening of our order books across several product lines, most notably in small ag and turf as well as construction.”
Inside John Deere’s Q1 2026 results
John Deere generated $9.611 billion in net sales and revenues in Q1 2026, compared to $8.508 billion for the same quarter in 2025, the OEM reported. Net income fell from $869 million in Q1 2025 to $656 million in Q1 2026, as cost of sales increased.
Per business unit, John Deere’s small agriculture and turf business registered $2.168 billion in net sales in Q1 2026, compared to $1.748 billion in the same quarter last year. Construction and forestry also registered $2.670 billion in net sales in Q1 2026, compared to $1.994 billion in the same quarter last year.
Additionally, John Deere’s production and precision business registered declines in operating margins, dropping from $338 million in Q1 2025 to $139 million in Q1 2026. However, the OEM eked out a gain in production and precision agriculture net sales with $3.163 billion for the quarter, compared to $3.067 billion for the same quarter last year.
Despite challenges to its production and precision business, John Deere beat its quarterly estimate, resulting in the OEM adjusting its 2026 full-year forecast for net income to $4.5-5 billion, previously forecasted for $4-4.75 billion, on the positive start to 2026.
“The developments over the course of the past three months have strengthened our belief that 2026 marks the bottom of the current cycle as we project mid-single-digit net sales growth for the equipment operations this fiscal year,” Seibert said.
What role do tariffs play in John Deere’s 2026?
Last year, John Deere’s business was impacted by tariffs, namely by 232 steel tariffs, which cost the OEM $600 million. This year, the ag equipment maker projects a $1.2 billion tariff impact.
However, the OEM signaled tariffs won’t have as large an impact on its business moving forward, Seibert explained. “In North America, it appears that we have moved past peak uncertainty. That the market is stabilizing, building off that,” he emphasised.
This comes as the U.S. Supreme Court is set to rule on the legality of the Trump administration’s use of executive powers to impose tariffs, which could result in tariff refunds.
If this happens, John Deere will take a prudent approach to assessing the impact tariff refunds will have on its prices, Josh Beal, director of investor relations for John Deere, shared in the earnings call.
“Similar to when we saw tariffs going up last year, we did not take immediate price action, and you can expect a similar approach for us this year in 2026,” Beal elaborated.
