John Deere reported fiscal Q1 earnings this morning that blew the doors off expectations. The company posted $2.42 per share against a consensus of $2.11 — a 15% beat. Revenue came in at $8 billion, up from $6.8 billion a year ago. Total net sales and revenues surged 13% to $9.6 billion. And perhaps most importantly, Deere raised its full-year net income guidance to a range of $4.5 billion to $5.0 billion.
CEO John May did not mince words about where the company stands: “2026 represents the bottom of the current cycle and provides us with a strong foundation for accelerated growth going forward.” That is the kind of statement that either ages brilliantly or becomes a cautionary tale pinned to the wall of every analyst’s office. But the numbers back him up. Construction and Forestry sales exploded 34% with operating profit more than doubling. Small Agriculture and Turf rose 24% with operating margins expanding from 7.1% to 9.0%. Order books are strengthening. Shipments are running ahead of plan.
The large agriculture segment remains under pressure — Production and Precision Ag saw operating profit drop 59% on higher tariffs, unfavorable mix, and warranty costs. U.S. and Canada large ag equipment demand is expected to fall another 15-20% this fiscal year. But that is precisely the point. The rest of the business is more than picking up the slack, and when large ag eventually turns, Deere will have multiple cylinders firing at once.
What makes this report compelling for investors is the cyclical positioning. Agricultural equipment stocks are classic cycle plays, and calling the bottom is worth real money. Deere has been investing heavily in R&D through the downturn — precision agriculture, autonomous machinery, and AI-driven farm management tools. CEO May said those investments are “yielding measurable results” and the company is preparing to launch a range of innovative products across all segments. Translation: they spent the downturn building, not cutting.
The tariff headwind is real. Higher production costs hit every segment this quarter. But Deere is managing through it with price realization in the 1.5-2.5% range across divisions and favorable currency translation helping the top line. For investors looking beyond the current noise, a company that just beat estimates by 15%, raised guidance, and told you the worst is behind it deserves a closer look. Cyclical bottoms do not announce themselves with press releases — except sometimes they do.