DE delivered a strong upside beat on both the top and bottom line, but the mix tells the story — Construction & Forestry is doing the heavy lifting while Production & Precision Ag remains in cyclical trough territory. Total net sales & revenues reached $13.37B (+4.7% YoY), well above the $11.56B Zacks bar, and diluted EPS came in at $6.55, beating $5.81 by 12.7%. C&F revenue jumped +29% YoY to $3.79B with operating profit up 48% to $561M on data center / rental / infrastructure demand. Production & Precision Ag fell -14% YoY to $4.50B; operating profit -38% to $706M. FY2026 net income guide held at $4.5–$5.0B with US/CA Large Ag still expected -15–20% (FY26 framed as cycle trough).

Key Metrics Trends

Metric	FY24Q2	FY24Q3	FY24Q4	FY25Q1	FY25Q2	FY25Q3	FY25Q4	FY26Q1	FY26Q2
Production & Precision Ag ($M)	$6.6B	$5.1B	$4.3B	$3.1B	$5.2B	$4.3B	$4.7B	$3.2B	$4.5B
Production & Precision Ag ($M) YoY %	-	-	-	-	-20.5%	-16.2%	+10.1%	+3.1%	-13.9%
Small Ag & Turf ($M)	$3.2B	$3.1B	$2.3B	$1.7B	$3.0B	$3.0B	$2.5B	$2.2B	$3.5B
Small Ag & Turf ($M) YoY %	-	-	-	-	-6.0%	-0.9%	+6.5%	+24.0%	+16.4%
Construction & Forestry ($M)	$3.8B	$3.2B	$2.7B	$2.0B	$2.9B	$3.1B	$3.4B	$2.7B	$3.8B
Construction & Forestry ($M) YoY %	-	-	-	-	-23.3%	-5.4%	+27.0%	+33.9%	+28.6%
Financial Services ($M)	$1.4B	$1.5B	$1.5B	$1.5B	$1.4B	$1.4B	$1.5B	$1.4B	$1.4B
Financial Services ($M) YoY %	-	-	-	-	-0.7%	-4.8%	+1.7%	-5.9%	-1.4%
Total net sales & revenues	$15.2B	$13.2B	$11.1B	$8.5B	$12.8B	$12.0B	$12.4B	$9.6B	$13.4B
Total net sales & revenues YoY %	-	-	-	-	-16.2%	-8.6%	+11.2%	+13.0%	+4.7%
P&P Ag op profit ($M)	$1.6B	$1.2B	$657M	$338M	$1.1B	$580M	$604M	$139M	$706M
P&P Ag op profit ($M) YoY %	-	-	-	-	-30.4%	-50.1%	-8.1%	-58.9%	-38.5%
C&F op profit ($M)	$668M	$448M	$328M	$65M	$379M	$237M	$348M	$137M	$561M
C&F op profit ($M) YoY %	-	-	-	-	-43.3%	-47.1%	+6.1%	+110.8%	+48.0%
Diluted EPS	$8.53	$6.29	$4.55	$3.19	$6.64	$4.75	$3.93	$2.42	$6.55
Diluted EPS YoY %	-	-	-	-	-22.2%	-24.5%	-13.6%	-24.1%	-1.4%

DE is mid-cycle for ag, early-cycle for construction. The story is now a balanced compounder narrative: C&F absorbing weakness in Large Ag, Small Ag & Turf inflecting (+16% YoY), and the FY26 trough call standing — with potential 2027 ag recovery as the next leg. Tariff exposure (~$1.2B gross / ~$900M net) is the swing factor.

Beat/Miss

Guidance

Catalysts

Street Q&A

Contradictions

Read-Throughs

This Quarter vs Consensus

Metric	Consensus	Actual	Variance	Beat/Miss
Revenue (net sales & revenue)	$11.56B Zacks	$13.37B	+$1.81B / +15.7%	Big beat
Diluted EPS	$5.81 Zacks	$6.55	+$0.74 / +12.7%	Big beat
C&F segment revenue	Implied ~$2.95B (flat to up modestly)	$3.79B	+29% YoY (raised industry view)	Major upside
P&P Ag op profit	Decline expected	$706M	-38% YoY	In line w/ cycle
Small Ag & Turf revenue	Modest growth	$3.49B	+16% YoY	Beat

Pattern: DE is back to beating again after Q1 FY26 missed both top and bottom line. EPS beat magnitude of 12.7% is the largest in 4 quarters. L4Q EPS beat rate ~75%. C&F is the structural surprise — order book +60% since November and ~80% of FY production slots filled.

Guidance Deep Dive

Metric	Prior Guide	New Guide	Signal
FY26 Net income attributable to Deere	$4.5B-$5.5B (Feb '26)	$4.5B-$5.0B	Top of range tightened down — still net positive vs Street ahead of print
U.S. & Canada Large Ag industry	Down ~15%	Down 15%-20%	Modestly worse — cycle trough confirmed for FY26
U.S. & Canada Small Ag & Turf industry	Flat	Flat to +5%	Modest positive revision
U.S. & Canada Construction & Forestry industry	Up ~5-10%	Up ~20% (raised)	Material upgrade — data center / rental / infrastructure
Tariff exposure (gross / net)	~$1.2B gross / ~$900M net	Reaffirmed	Significant — managed via resourcing / USMCA / exemptions, no surcharge

Tone was confident on construction and disciplined on agriculture. CFO Brent Norwood emphasized DE is mitigating tariffs via resourcing, USMCA compliance, and exemption submissions rather than customer surcharges. Management reiterated that FY2026 represents the bottom of the current ag cycle, with expectations for recovery starting in 2027 — a key signal for investors. Source: DE Q2 FY26 transcript (Motley Fool / Investing.com).

Upcoming Catalysts

Catalyst	Timing	Consensus / Watch	Implication
Construction & Forestry uplift	FY26-FY27	Industry guide raised to +20% YoY for U.S./Canada	Earnings cushion against the ag trough — primary bull case
Large Ag cycle bottom	FY26 trough; recovery FY27	Mgmt baseline: 2026 = trough; net farm income, commodity prices key	Sets up 2027 normalization optionality
Tariff mitigation execution	Ongoing FY26	$1.2B gross / $900M net; USMCA / resourcing / exemptions	Big earnings swing factor; no customer surcharge
Order book and slot fill	FY26	C&F order book +60% since Nov; ~80% of production slots filled	Visibility supports C&F guide credibility
Precision ag adoption (See & Spray / autonomy)	FY26-27	Technology revenue and recurring software growth	Long-term margin / multiple lever

Street Q&A

Question	Management response	Assessment
Why narrow FY26 guide despite a beat?	Tariff variability and ag cycle uncertainty kept upper end conservative; not a tone change.	Well answered
How is C&F holding up vs the ag slump?	Data centers, rental, infrastructure spending — order book at highest level since Apr 2024.	Well answered
Tariff offsets and surcharges?	Mitigation via resourcing, USMCA, exemptions; no customer surcharge introduced.	Well answered
When does ag recover?	FY26 is the trough; expecting 2027 starting recovery — but commodity prices and farm income data dependent.	Honest, conditional
Capital allocation and buybacks?	Continued return of cash to shareholders; balance sheet capacity intact.	Adequate

Contradictions

Indirect Read-Throughs

Theme	Commentary	Read-through
Construction equipment	C&F orders +60% since Nov; +20% industry guide	Positive read for CAT, OSK, URI, HRI rental; AECOM/infrastructure plays
Data center driven equipment demand	DE explicitly called out data center investment as driver	Confirms VRT / GEV / TLN / VST data-center capex narrative
Large Ag cycle	U.S./Canada Large Ag -15-20%; trough FY26	Bearish for AGCO, CNH; net farm income data is key tell
Tariffs / supply chain	$1.2B gross exposure; no customer surcharge	Negative for tariff-heavy industrials; USMCA-compliant peers (CAT, PCAR) less exposed
Small Ag & Turf inflection	+16% YoY rev, op profit $719M (+25%)	Positive for TTC, BGS-style consumer outdoor / lifestyle ag exposure

Data sourced from Daloopa. Document search is currently in beta; transcript and filing snippets may vary.