Deere & Company (DE) Financials

Deere & Company’s latest financial statements show a business recovering from the weaker conditions seen in early fiscal 2026, although quarterly performance remains below the strong levels recorded in 2023 and early 2024. Fiscal third-quarter revenue increased to $12.61 billion from $12.02 billion in the restated year-ago quarter, while net income attributable to common shareholders rose to $1.38 billion from $1.29 billion. Operating income also improved 8.3% year over year to $2.59 billion.

Profitability improved modestly year over year. Deere’s third-quarter gross margin was approximately 37.0%, compared with 37.0% in the restated third quarter of fiscal 2025, while operating margin rose to roughly 20.6% from 19.9%. However, results declined sequentially from the second quarter, when revenue was $13.37 billion and net income was $1.77 billion, highlighting continued seasonality and uneven demand.

• Year-over-year earnings recovery: Third-quarter net income attributable to common shareholders increased about 8.3% year over year, and diluted EPS rose to $5.10 from $4.75.
• Improved operating leverage: Third-quarter operating income increased to $2.59 billion despite revenue growth of only about 4.9%, helping lift the operating margin.
• Lower interest expense: Interest expense declined to $710 million from $794 million in the restated year-ago quarter, providing some relief to pretax profitability.
• Operating cash flow rebounded during fiscal 2026: Cash flow from operations improved from negative $890 million in the first quarter to $1.93 billion in the second quarter and $2.21 billion in the third quarter.
• Positive cash generation after capital spending: Third-quarter operating cash flow exceeded capital expenditures of $903 million by approximately $1.31 billion, leaving room to fund dividends, debt reduction and share repurchases.
• Debt is below the year-ago level: Total short- and long-term debt was approximately $63.8 billion at the end of the third quarter, down from $66.6 billion a year earlier.
• Shareholder returns remain substantial: Deere paid $438 million in dividends and repurchased $197 million of stock during the third quarter. The quarterly dividend remained at $1.62 per share, above the $1.47 paid in fiscal 2024.
• Equity has strengthened: Total common equity increased to $27.99 billion from $25.18 billion in the restated year-ago quarter, supported by higher retained earnings and ongoing profitability.
• Liquidity is sizeable but specialized: Deere held $8.93 billion of cash and $1.35 billion of short-term investments, but its $28.28 billion of current assets remained below $30.78 billion of current liabilities.
• Sequential momentum weakened: Third-quarter revenue fell approximately 5.7% from the second quarter, while net income attributable to common shareholders declined about 22.2%, indicating that the recovery is not yet consistent across quarters.

Working-capital trends deserve attention. Accounts receivable increased to $10.19 billion from $8.93 billion a year earlier, while inventory was relatively stable at $7.81 billion. The combination of higher receivables and a current ratio below 1.0 could constrain near-term flexibility if agricultural and construction equipment demand weakens further.

Cash generation has improved substantially from the first quarter, but it remains volatile. Deere generated negative operating cash flow in the first quarter because of a $2.21 billion use of operating working capital. The subsequent recovery suggests that working-capital movements, rather than a lack of accounting profitability, have been the primary driver of quarterly cash-flow swings.

Investors should also recognize that Deere’s financial-services activities create unusually large investment and receivables balances. The cash-flow statement includes billions of dollars of investment purchases and sales, so reported investing cash flow may not represent conventional manufacturing capital allocation alone. Overall, the statements point to improving third-quarter profitability and cash flow, balanced against seasonal revenue pressure, elevated leverage and a still-tight current-liquidity position.