Deere & Co. 8R autonomous tractor is pictured at Jensen Test Farm in Bondurant, Iowa.Staff/Reuters
Farm-machinery maker Deere & Co DE-N raised its annual profit forecast on Thursday citing a rebound in its construction and small agriculture businesses and cost cuts that mitigated weak equipment demand, sending its shares up 4.7 per cent before the bell.
The world’s largest farm-equipment maker previously scaled back factory production to counter weak demand for new machinery as lower crop prices and higher input costs push farmers to postpone big-ticket purchases.
The company is also working closely with dealers across its network to reduce inventory levels.
U.S. farmers are heading into another season of weak crop prices and elevated costs, forcing tough decisions about how, or if, to continue operating as ample grain supplies pressure markets.
The company expects net income for 2026 to range between US$4.5-billion and US$5-billion, compared with its prior forecast of US$4-billion to US$4.75-billion.
“While the global large agriculture industry continues to experience challenges, we’re encouraged by the ongoing recovery in demand within both the construction and small agriculture segments,” CEO John May said.
“These positive developments reinforce our belief that 2026 represents the bottom of the current cycle.”
Deere now expects 2026 net sales in two segments - Small Agriculture & Turf and Construction & Forestry - to rise about 15 per cent each compared with its earlier forecast for a roughly 10-per-cent increase.
U.S. President Donald Trump’s sweeping tariffs have weighed on its operating profits, making Deere one of the many industrial companies affected by policy shifts from the White House.
The Moline, Illinois-based firm has struggled from higher, tariff-driven production costs as it relies significantly on imported raw materials to manufacture its green and yellow tractors.
It posted net income of US$656-million, or US$2.42 per share, for the quarter, down from US$869-million, or US$3.19 per share, a year ago.
Deere’s first-quarter revenue rose 13 per cent to US$9.61-billion, from US$8.50-billion a year ago.