Deere & Co. anticipates a significant tariff impact in 2026, with a pre-tax hit expected to reach $1.2 billion compared to $600 million in 2025.
The farm-equipment maker's CEO, John May, highlighted ongoing margin pressures from tariffs, particularly affecting large tractors.
Despite the challenges, Deere expects to benefit from cost cuts and strong demand in forestry and small agriculture markets.
The company's profit forecast for fiscal 2026 falls below analysts' expectations, with a range of $4.00 billion to $4.75 billion, compared to estimates of $5.33 billion.
In Q4 2024, Deere reported a quarterly net income of $1.06 billion, down from $1.24 billion in the year-ago period, with revenue surpassing estimates at around $12.4 billion, up 11% from the previous year.
Tariff Impact in 2026
Deere expects a sizable pre-tax tariff hit of $1.2 billion in 2026 compared to $600 million in 2025.
Profit Forecast
Deere foresees its annual net income for fiscal 2026 to be between $4.00 billion and $4.75 billion, falling below analysts' estimates of $5.33 billion.
Q4 2024 Performance
In Q4 2024, Deere reported a quarterly net income of $1.06 billion, down from $1.24 billion in the same period last year, with revenue exceeding estimates at $12.4 billion.
- Deere & Co. faces increased tariff pressure in 2026, affecting margins on large tractors and leading to a lower profit forecast for the year.
- The company's stock declined by 5% following the profit forecast below analysts' expectations.
- Farmers opting for rentals or used equipment over new purchases due to lower crop prices and rising production costs have contributed to Deere's challenges in the agricultural equipment market.
Deere & Co.'s outlook for fiscal 2026 reflects the prevailing challenges in the industry, with tariff impacts and margin pressures impacting its profit expectations. The company's strategies to mitigate these challenges, such as cost cuts and exploring new markets, will be crucial for navigating the evolving landscape.