These companies use the creative forces of capitalism to solve big problems—and do well by doing good.

The agricultural machinery giant is using software, connectivity, and automation to boost farm productivity; cut down on fuel, chemical, and water use; and allow customers to meet input-efficiency and emissions goals. It upgraded its harvest automation system in 2025 to add predictive inputs, which enable farmers to measure crop variability and control ground speed. Autonomous tractors allow farmers to cover more ground during crop cycles, the company says. Meanwhile, Deere has introduced technologies like See &amp; Spray Ultimate, which deploys cameras and machine learning to target weeds.

Change the World

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Based in Moline, Ill., this maker of tractors, combines, and other agricultural gear endured a tough 2024, as weather disruptions and trade tensions fueled a global downturn in farming. The slump in U.S. homebuilding, meanwhile, hurt its construction equipment division. Overall, Deere’s revenue dropped 16% year over year, to $51.7&nbsp;billion.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are electrical equipment and industrial machinery.

Fortune Sector Leaders: Industrials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-081-Deere

John Deere—the machinery and equipment company famous for its iconic green tractor—had one of its most profitable years ever in 2022, reaching $7 billion, up 20% from the previous year, as it took a page from the tech industry’s playbook, developing self-driving tractors, satellite-linked smart equipment, and a software-as-a-service business. 
<ul> 
 	<li>Revenues in 2022 grew 19% as the company was able to pass much of the increase in production costs on to farmers who were flush with cash after corn and soybean prices hit record highs.</li> 
 	<li>In May 2023 Deere announced a plan to connect remote farms in Brazil and the U.S. to state-of-the-art machinery via satellite.</li> 
 	<li>The tractor maker suffered a legislative setback in Colorado in April 2023 when Gov. Jared Polis signed a “right to repair” bill, enabling farmers to fix their own equipment, thus ending Deere’s monopoly on repairs of its machinery.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500-2022-084-Deere

A staple of American manufacturing for nearly 200 years, Illinois-based Deere makes agricultural and construction machinery as well as diesel engines and lawn care equipment. In 2021, the company posted 24% year-over-year revenue growth. Profits jumped, too, with demand for its machinery snapping back as the global economy rebounded. Deere also smoothed its labor outlook for the near future by reaching a six-year labor agreement with the United Auto Workers union in November 2021, ending a five-week strike. After Russia’s invasion of Ukraine, Deere suspended shipments of machinery to Russia and Belarus.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Even during a pandemic, people still have to eat. Agriculture was one business to ride out 2020 in a strong position. Deere, the 184-year-old American icon and maker of heavy machinery, saw strong agricultural sales corresponding with the seasonality of farming. That was largely enough to counter the lower demand for construction equipment made by Deere over the same time frame, with construction projects halted owing to COVID-19. Deere, however, still saw revenue fall 9.5%, to $35.5 billion, between 2019 and 2020. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">Even during a pandemic, people still have to eat. Agriculture was one business to ride out 2020 in a strong position. Deere, the 184-year-old American icon and maker of heavy machinery, saw strong agricultural sales corresponding with the seasonality of farming. That was largely enough to counter the lower demand for construction equipment made by Deere over the same time frame, with construction projects halted owing to COVID-19. Deere, however, still saw revenue fall 9.5%, to $35.5 billion, between 2019 and 2020.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-88-Deere

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Even during a pandemic, people still have to eat. Agriculture was one business to ride out 2020 in a strong position. Deere, the 184-year-old American icon and maker of heavy machinery, saw strong agricultural sales corresponding with the seasonality of farming. That was largely enough to counter the lower demand for construction equipment made by Deere over the same time frame, with construction projects halted owing to COVID-19. Deere, however, still saw revenue fall 9.5%, to $35.5 billion, between 2019 and 2020. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">Even during a pandemic, people still have to eat. Agriculture was one business to ride out 2020 in a strong position. Deere, the 184-year-old American icon and maker of heavy machinery, saw strong agricultural sales corresponding with the seasonality of farming. That was largely enough to counter the lower demand for construction equipment made by Deere over the same time frame, with construction projects halted owing to COVID-19. Deere, however, still saw revenue fall 9.5%, to $35.5 billion, between 2019 and 2020.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-319-Deere

John May is not even a full year into his tenure as only the 10th chief executive ever to lead the 183-year-old American icon. He finds himself at the helm of the $39.2 billion agricultural giant as it rolls with virus-related punches; Deere briefly suspended production of construction and forestry equipment at some facilities amid weakened demand and pivoted to manufacturing 400,000 face shields for health care workers. For 2019, the company's revenue rose 5.1% year-over-year and profits spiked by 37%, to $3.3 billion. But even before the pandemic, Deere said it expected sales to fall at least 10% in 2020.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-084-Deere

John May is seven months into his tenure as only the 10th chief executive ever to lead the 183-year-old American icon. He finds himself at the helm of the $39.2 billion agricultural giant as it rolls with virus-related punches; Deere briefly suspended production of construction and forestry equipment at some facilities amid weakened demand, and is now manufacturing 400,000 face shields for health care workers. The company's revenue rose 5.1% year-over-year and profits spiked by 37%, to $3.3 billion in 2019. But even before the pandemic, Deere said it expected sales to fall at least 10% in 2020.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

Culture rank

Process rank

Product rank

Years on list

Previous rank

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Change The World

Impact Segment

Deere (commonly known as John Deere) is an agricultural giant that manufactures and sells tractors, harvesters, loaders, and other equipment used by farmers worldwide. Founded in 1837 as a maker of steel plows pulled by horses, the company has expanded into heavy machinery used for golf course maintenance, snow removal, and logging. The company introduced a self-driving tractor in 2022 and is pushing into machine learning to help increase agricultural production. As of 2024, it was among a small number of companies that have been on the Fortune 500 every year since the list’s inception in 1955.

Q3 2026

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Deere (DE): Company Profile, Stock Price, News, Rankings

legacy

Deere

deere

Good morning, and welcome to Deere & Company first quarter earnings conference call. Your lines have been placed in listen-only until the question and answer session of today's conference. I would now like to turn the call over to Mr. Josh Beal, Director of Investor Relations. Thank you. You may begin.

Hello. Welcome, and thank you for joining us on today's call. Joining me on the call today are Josh Jepsen, Chief Financial Officer, Ryan Campbell, President, Worldwide Construction, Forestry, and Power Systems, and Chris Seibert, Manager, Investor Communications. Today, we'll take a closer look at Deere's first quarter earnings, then spend some time talking about our markets and our current outlook for fiscal 2026. After that, we'll respond to your questions. Please note that slides are available to complement the call this morning. They can be accessed on our website at johndeere.com/earnings. First, a reminder, this call is broadcast live on the internet and recorded for future transmission and use by Deere & Company. Any other use, recording, or transmission of any portion of this copyrighted broadcast without the express written consent of Deere is strictly prohibited.

Participants in the call, including the Q&A session, agree that their likeness and remarks in all media may be stored and used as part of the earnings call. This call includes forward-looking statements concerning the company's plans and projections for the future that are subject to uncertainties, risks, changes in circumstances, and other factors that are difficult to predict. Additional information concerning factors that could cause actual results to differ materially is contained in the company's most recent Form 8-K, Risk Factors in the Annual Form 10-K, as updated by reports filed with the Securities and Exchange Commission. This call also may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP). Additional information concerning these measures, including reconciliations to comparable GAAP measures, is included in the release and posted on our website at JohnDeere.com/earnings under Quarterly Earnings and Events.

I will now turn the call over to Chris Seibert.

Good morning, and thank you for joining us today. John Deere completed the first quarter with a 5.9% operating margin for the equipment operations. Our results reflect the strength and resilience of a diversified portfolio spanning multiple end markets and geographies. All business segments delivered higher net sales year-over-year, with both Small Ag and Turf and Construction & Forestry top-line growing by over 20%. Our results for the quarter exceeded our forecast, driven by shipping volumes that were ahead of our initial plan. Importantly, over the course of the quarter, we saw continued strengthening of our order books across several product lines, most notably in Small Ag and Turf, as well as construction. In earthmoving, double-digit year-over-year growth in retail settlements and a growing order bank have prompted us to increase our industry outlooks for both construction and compact construction equipment in North America.

In small ag, order activity for mid-size tractors supporting the dairy and livestock production system has remained solid, while order velocity for North American turf equipment and compact utility tractors has increased. Global large ag fundamentals, while still challenged, were largely stable over the quarter. This stability has enabled a modest improvement in our net sales forecast for North American large ag this year, as our combined Early Order Program finished better than expected, and large tractor order activity has increased. These improvements have helped us to offset softer projections for the South American ag equipment market in 2026. The developments over the course of the past three months have strengthened our belief that 2026 marks the bottom of the current cycle, as we project mid-single-digit net sales growth for the equipment operations this fiscal year. Slide three starts with the results for the first quarter.

Net sales and revenues were up 13% to $9.611 billion, while net sales for the equipment operations were up 18% to $8.001 billion. Net income attributable to Deere & Company was $656 million or $2.42 per diluted share. Turning to our individual segments, we begin with the Production and Precision Ag business on Slide 4. Net sales of $3.163 billion were up 3% compared to the first quarter last year, primarily due to positive effects of foreign currency translation. Price realization was roughly flat. Price realization in North America was positive, though was offset by additional incentives for the South American market. Currency translation was positive by nearly 4 points.

Operating profit was $139 million, resulting in a 4.4% operating margin for the segment. The year-over-year decrease was primarily due to higher tariffs, unfavorable sales mix, and higher warranty expenses. Moving on to Small Ag and Turf on Slide 5. Net sales were up 24%, totaling $2.168 billion in the first quarter because of higher shipment volumes and positive effects of foreign currency translation. Price realization was positive by 2 points. Currency translation was also positive by just under 2.5 points. Operating profit increased year-over-year to $196 million, resulting in a 9% operating margin. The increase was primarily due to higher shipment volumes, favorable sales mix, and price realization, partially offset by higher tariffs. Slide 6 gives our industry outlook for ag and turf markets globally.

We continue to expect the large ag equipment industry in the U.S. and Canada to decline 15%-20% this year. However, we are seeing encouraging developments that should provide stability to this segment in the near term, while also improving the setup for return to growth. While global row crop production remains strong, global production remains strong, robust demand for commodities and a normalization of trade flows are providing support for prices at current levels, which are above the lows that growers experienced last summer. Additionally, government programs are supporting farmer liquidity in the short term. Ongoing improvement in the used inventory market is providing a better environment for machine replacement, while the age of the fleet continues to grow. Additionally, proposed government policy actions, including additional support for biofuels, provide potential tailwinds for growth.

For Small Ag and Turf in the U.S. and Canada, industry demand estimates remain flat to up 5%. The dairy and livestock sector remains profitable due to strong beef prices, while the turf market is seeing a modest return to growth as that sector normalizes after several years of declines. Moving to Europe, the industry is still projected to be flat to up 5%. The underlying fundamentals of the ag sector are largely unchanged, with no near-term material impact expected from newly negotiated E.U. trade agreements or recent declines in milk prices. Interest rates are steady, long-term financing costs are manageable, and the region continues to show resilience across key arable markets.

In South America, industry sales of tractors and combines are now expected to be down approximately 5%, driven by the Brazilian market, where subdued commodity prices, high interest rates, and a stronger BRL are putting pressure on producer margins. Industry sales in Asia are now projected to be flat to down 5%. The Indian market is now expected to only be down slightly from the strong level seen in 2025. Next, our segment forecasts begin on slide 7. For Production and Precision Ag, net sales are still forecasted to be down between 5% and 10% for the full year. The forecast assumes roughly 1.5 points of positive price realization and about 3 points of partially positive currency translation. For the segment's operating margin, our full year forecast remains between 11% and 13%.

Slide 8 shows our forecast for the Small Ag and Turf segment. We now expect net sales to be up about 15%. This includes 2 points of positive price realization as well as 2 points of positive currency translation. The segment's operating margin guide is now between 13.5% and 15%. Shifting now to Construction & Forestry on slide 9. Net sales for the quarter increased roughly 34% year-over-year to $2.67 billion, due to higher shipment volumes and positive effects of foreign currency translation. Price realization was negative, but just under 0.5 point. Currency translation was positive, but 3.5 points.

Operating profit of $137 million more than doubled year-over-year, resulting in a 5.1% operating margin due primarily to favorable shipment volumes as well as production efficiencies, partially offset by higher tariffs. Slide 10 describes our Construction & Forestry industry outlook. Industry sales for both construction equipment and compact construction equipment in the U.S. and Canada are now expected to be up around 5% year-over-year. Construction markets remain solid, supported by U.S. government infrastructure spending, declining interest rates, strong rental demand, and data center construction starts. Our year-to-date retail settlement activity is running ahead of our expectations, and our order books continue to grow. Global forestry markets are still expected to remain flat. Global road building markets are now expected to be up around 5%, driven by market increases in both North America and Europe.

Moving to the C&F segment outlook on Slide 11. 2026 net sales are now forecasted to be up around 15%. Our net sales guidance for the year includes about 2.5 points of positive price realization and just over 2 points of positive currency translation. Our projection for the segment's operating margin also increased and is now estimated to be between 9% and 11%. Now, transitioning to our financial services operations on Slide 12. Worldwide financial services net income attributable to Deere & Company in the first quarter was $244 million. The year-over-year increase was mainly due to favorable financing spreads and a lower provision for credit losses, partially offset by favorable special items recorded in the first quarter last year.

For fiscal year 2026, our outlook increased to $840 million, primarily driven by lower provision for credit losses. Finally, slide 13 outlines our guidance for net income, effective tax rate, and operating cash flow. For fiscal year 2026, our updated outlook for net income is now between $4.5 billion and $5 billion. Next, our guidance continues to incorporate an effective tax rate between 25% and 27%. Lastly, projections for cash flow from the equipment operations increased by $500 million at both ends of our range and is now expected to be between $4.5 billion and $5.5 billion. This concludes our formal comments. We'll now shift to a few topics specific to the quarter. To start, let's review these results this quarter.

Net sales increased by about 18% year-over-year, and margins were just under 6%. Although the first quarter of fiscal year 2025 had an easier top-line compare, given last year's underproduction in Small Ag and Turf and Construction & Forestry, it still performed ahead of our plan. Josh Beal, could you explain what happened this quarter and how it affected our full year outlook?

Yeah, absolutely, Chris. Let's start with our expectations for the quarter. Overall, we were projecting double-digit net sales growth in the equipment operations, driven by estimates for over 20% growth in both small ag and construction and forestry, while large ag sales were expected to be flat year-over-year. Despite the projected net sales increase, we were expecting lower equipment operations operating margin year-over-year due to incremental tariff expenses and an unfavorable product and regional mix in large ag. Across all three businesses, business units, we executed ahead of our plan for the quarter, and as a result, our performance reflects better top line and margins than originally forecasted. Better than expected shipment volume was the primary driver of both the top line and margin beat.

In PPA, shipments of North America large tractors were ahead of plan, while C&F benefited from higher road building sales in Europe and North America, as well as ahead of planned shipments of both construction and compact construction equipment in North America. On the pricing front, C&F pricing was slightly negative this quarter, although competitive price pressures have started to show signs of easing. The results from the quarter in C&F had a slight impact on the timing of our expected price realization in the segment, and as a result, we've revised our full-year forecast down by 0.5 point. PPA pricing was neutral during the quarter, primarily due to discounts implemented in South America, responding to FX movements, as well as targeted field inventory reductions. Our PPA price guidance for the full year remains unchanged, and we still expect positive full-year price realization in South America.

Foreign exchange was also impactful in the quarter. The U.S. dollar was weaker year-over-year against several relevant currencies for Deere, particularly the euro and Brazilian real. The translation impact drove year-over-year net sales gains for all three business units. Transitioning to cost management, excluding tariffs, production costs were lower year-over-year for all business segments in the first quarter. This was largely attributable to operational efficiencies from higher production and disciplined overhead spending. Tariffs for the year are still projected at around $1.2 billion, as mitigation on Section 232 steel tariffs and some relief in India have been offset by volume growth. As you mentioned in your opening comments, our full-year industry demand outlooks for most markets improved over the course of the quarter.

We maintained our net sales guidance for PPA, even though South America softened due to some incremental improvement in North America, and we increased the net sales ranges for SAT and C&F by 5 points. That resulted in higher projected margin ranges for small AG and C&F, resulting in an increased net income forecast of $4.5 billion-$5 billion.

Perfect. Thanks for that breakdown, Josh. It is encouraging to see that our teams continue to execute and focus on what we can control, while also seeing some pickup in end market demand. Now, let's take a moment to talk about the broad AG industry. Since late last year, we've seen several supportive developments in the U.S. market, including the recently announced $12 billion Farmer Bridge Assistance Program and renewed purchase commitments for U.S. commodities. Can you add some additional color to what this could mean for U.S. growers?

Sure, Chris. I'll start by reiterating a couple of comments on the global AG economy that you mentioned in your opening. Global crop production remains strong, but so does global demand. At current commodity price levels, producer margins remain pressured in many geographies. Specifically for the U.S., the USDA just updated their 2026 forecast for net cash farm income. While 2026 U.S. net cash farm income is forecasted to be up around 3% from 2025, much of this increase is being driven by more government payments. Crop cash receipts are expected to be up slightly this year, but expenses are projected to increase as well. Given this setup, we continue to anticipate a challenging environment for many row crop farmers.

However, as you mentioned, we're starting to see some stability for producers as China has resumed purchasing U.S. soybeans, and the recently approved government support program looks to provide some near-term liquidity. Additionally, strong farmland values are keeping debt ratios low, despite the lower margin backdrop. Notably, the U.S. fleet age is high and continues to get older as customers put more hours on their equipment. With the stabilization that we're seeing in U.S. ag fundamentals, along with an improving used market, our expectation is that we'll start to see some replacement demand return.

This is Jepsen. Maybe one key point to reinforce. The government payments should continue to mitigate downside risks for farmers' balance sheets, acting as a bridge in an environment where crop cash receipts are under pressure. We believe that future policies around renewable fuels and additional export opportunities should drive demand and provide continued stability.

Great. Thank you both. With the developments over the quarter in North America, it appears that we've moved past peak uncertainty and that the market is stabilizing. Building off that, could you also share an update regarding global AG inventories and order books?

Yeah, definitely. Let's start with large AG in North America. On the new inventory side, we continue to be in a great position and hold on to our plan to produce in line with retail demand in fiscal 2026. We also continue to make progress in North American used inventories. We saw a typical seasonal increase in used Deere combines during our first quarter. However, current inventory levels for Deere combines remain about 15% below their peak in March 2024, with model year distribution at a normal mix. Deere high horsepower tractor units were down mid-single digits in our first quarter and have declined by over 10% from their March 2025 peak. Late model mix is improving too.

It's notable that while total Deere high horsepower tractors are down over 10% from March, model year 2022 and model year 2023 8R tractors are down more than 40% in that same time period. Just this past quarter alone, model year 2022 and model year 2023 8Rs were down over 20% sequentially, with model year 2024 8Rs also declining by over 10%. While continued reduction in used tractors remains a focus, we're encouraged by the progress that we're seeing. At the same time, large tractor order velocity for the North American market has picked up, and our rolling order books now provide visibility into the fourth quarter.

We also just recently took our last calls for North American combine orders for the year, and while we still expect that overall North American large AG industry to be down 15%-20% this year, combines will be down less than that range. Similar to North America, we feel good about our new inventory positions in both Europe and South America. The one exception is combines in Brazil, where we're a bit higher than we want to be. We'll underproduce retail for Brazilian combines in our second and third quarters to bring those inventory levels down. Despite being higher than our target, our current inventory to sales ratio for combines is still significantly lower than what we see with competitors. As far as order visibility, European tractor order books are currently 4-5 months out, while South American orders are full through our second quarter.

... Turning to Small Ag and Turf in North America, last year's underproduction resulted in healthy beginning inventory levels for this segment that remain in place today. For reference, current new field inventory for both tractor horsepower categories in this segment, that's the less than 100 horsepower category and the 100 to 220 horsepower category, are each about 40% lower year-over-year. Our ability to maintain those lower inventory levels reinforces our plan to build in line with retail demand in small ag this year. And commitment to that plan has been further supported by strength in order activity in the first quarter.

This is Jepsen. Let me share an additional perspective following Beal's comments. Our channel has consistently worked to reduce used inventory levels, and our deliberate approach to managing production and inventories set us up favorably both this year and into the next. With growing demand across various other markets and segments, we feel good about how we're positioned to execute for the remainder of 2026.

Thank you both. Now, let's move on to Construction & Forestry. Josh Beal, we've already touched on C&F's performance in Q1, but can you please give us an update on the current business environment and outlook for 2026?

Yeah, happy to, Chris. Let me start with the current market environment, and Ryan, please jump in with any additional color you might have. As you noted earlier, construction markets are a bright spot and continue to demonstrate resilience, bolstered by US government infrastructure investments, decreasing interest rates, and improved rental demand. Recall that we underproduced retail in the first half of fiscal 2025, which set us up to produce in line with retail demand this year. We saw strength in our first quarter in retail sales that exceeded our estimates, as settlements of construction and compact construction equipment were both up mid-teens year-over-year in our first quarter. What's perhaps most encouraging is that our order bank has risen by over 50% in the past quarter, reaching its highest point since May of 2024.

This provides us with clear visibility into the second half of the fiscal year, allowing the construction and forestry team to optimize their production plans accordingly. Overall, we're very encouraged by the momentum that we've seen to start the year. Ryan, is there anything you'd like to add?

Absolutely. I share your enthusiasm, and I'm excited about what's on the horizon for this business. As I mentioned at our recent investor event in New York, there are numerous reasons for my optimism. At a macro level, the world is facing growing urgency to upgrade or replace key infrastructure. Investment in single-family housing, especially across the United States, needs to increase, and there's a huge demand to support the required infrastructure for AI investments. To get all this work done, the industry must boost productivity significantly, with machines doing more work with precision and utilizing less resources overall. Meeting these goals require smart machines and data-driven insights to execute tasks and manage job sites efficiently, and we believe we can help customers meet these challenges and will continue to invest on our side to ensure success.

Hey, thanks for the recap, Ryan. Could you remind us of the investments that we're making to meet those challenges?

Sure, Chris. Let's start with excavators. As we've talked about, we are excited to announce our new Deere-designed 20-ton class excavators at the upcoming CONEXPO Show in Las Vegas. We've included additional information in the appendix of the earnings presentation for those interested in more detail. Excavators represent about 40% of the North American construction equipment industry, and these models are the first introduction of fully Deere-designed and Kernersville, North Carolina-built machines to the market. We packed the new units with easy-to-use, productivity-enhancing technology while remaining absolutely focused on and making further improvements in quality and durability. This is the first step of what will be a multi-year launch plan for a complete line of excavators. We couldn't be more excited about sharing these first models with our customers.

The CONEXPO-CON/AGG event will feature 24 product launches, including world premieres of equipment from John Deere and 6 market debuts from the Wirtgen Group. The last several years, our efforts have been heavily focused on excavators. However, we continue to innovate across the product portfolio. From new equipment designs to the latest in precision and job site technology, we have never felt better about our complete product portfolio.

Thank you. Hey, on the digital side, yesterday, we completed the acquisition of Tenna. Could you please provide your insights on this acquisition and discuss how it aligns with the broader C&F business and strategy?

Yeah, we're incredibly excited about bringing the Tenna team and their capabilities into the John Deere portfolio of businesses. It might help to take a step back and talk through our strategy at a high level in the C&F division. We think about the construction industry and how we want to compete in three different layers: machines, tasks, and job sites. On the machine side, completing our product portfolio of best-in-class earthmoving equipment, both in high-precision machines and those that are more basic, is our focus at that level. Second, we're enhancing the tasks that the machines do individually on the job site through precision technologies like SmartGrade, SmartDetect, and SmartWeigh. The agreements with the three survey providers to provide a fully integrated grade control experience through our equipment is an example of what we are working on in this area.

Third, it's having the capabilities to help contractors and customers optimize their fleets, operations, and job sites. Tenna provides a leading technology platform that automates contractor workflows, gives near real-time insights into equipment operations and maintenance, and enhances visibility, planning and coordination to boost productivity and cut costs. Tenna's leading fleet-based products and services, combined with the productivity solutions from Virtual Superintendent, who we acquired a little over a year ago, along with the foundational capabilities we've built through the John Deere Operations Center, give us a unique value proposition to offer customers as they work to optimize their fleets, operations, and job sites. Importantly, Tenna and Virtual Superintendent are and will continue to be brand-agnostic, focused on mixed fleet solutions in step with the reality of the fleets and job sites in the industry.

... Thank you, Ryan. It sounds like there's a lot to be excited about in the Construction Forestry segment going forward.

This is Jepsen. Maybe one thing in addition to the C&F product releases, I'd like to share a quick comment about innovation in our other businesses. At the end of this month, we'll be at Commodity Classic in San Antonio, Texas, with several major product launches and updates to our advanced technology solutions. And just last week, at the World Ag Expo in California, we showcased several innovations that are helping drive value for our high-value crop producers as well.

Thank you both for your comments. Josh, do you have any final thoughts before we open the line for questions?

Yeah, thanks, Chris. The first quarter demonstrated great execution from our teams. All business segments operated efficiently and delivered results ahead of plan. At the same time, we saw stabilization and improvement in a variety of our end markets. Our channel maintained focus on inventory management, particularly in North American used equipment. Our financial strength has allowed us to maintain high levels of investment throughout the cycle, which positions us well for future growth, particularly as the cycle inflects. The recent and upcoming product and technology introductions are tangible examples of that outcome and bolster our confidence in our growth aspirations through the end of the decade and beyond. Over the quarter, we returned nearly $750 million in cash to shareholders through dividend, dividends and share repurchases, demonstrating that strong through-cycle financial performance supports both reinvestment in the business and shareholder return.

Finally, I'd like to express my sincere appreciation to all members of the Deere team. The commitment and dedication demonstrated by our employees, dealers, and suppliers across every area of the business have been instrumental in maintaining this high level of discipline. The Deere team is committed to executing our strategy and focused on solving our customers' biggest challenges.

Thanks, Josh. Now, let's open it up to questions from all our investors.

We're now ready to begin the Q&A portion of the call. The operator will instruct you on the polling procedure. In consideration of others and to allow more of you to participate in the call, please limit yourself to one question. If you have additional questions, we ask that you rejoin the queue.

Thank you. If you would like to ask a question, please press star one. If you need to withdraw your question, press star two. Our first question comes from Kristen Owen from Oppenheimer.

Hi, good morning. Thank you for taking the question. Just briefly, Josh Jepsen, thank you so much for all the help over the years. If I could start maybe with a pricing question. You gave some helpful commentary on PPA pricing, but I'm just wondering how we should think about the bridge from here at neutral in Q1 to the full year guide of 1.5%. And similarly, if you could help us, you trimmed your expectation on C&F. Can you just maybe walk us through what you're seeing on the pricing side there? Thank you so much.

Yeah, thanks, Kristen. Happy to. Yeah, starting with large ag, you know, the first quarter, as we mentioned, we did put some incremental incentives in place in South America. You know, as we mentioned, you know, we've seen a little bit of a slowdown in that market, and as a result, we're gonna pull down inventory a little bit in that market, just in combines. And maybe just for perspective, too, on the combine inventory, while we've come up a little bit in Q1, we're still about half of the levels on combines that we saw, that we peaked at in 2023. So still in really good shape, but wanna be proactive there.

As we've seen a little bit of a slowdown, we've taken some action. We don't expect that to continue through the year. As we mentioned, our expectation is for Brazilian price realization to be positive for the full year. And we've seen positive price in North America. Recall that we did some accrual in the third quarter of last year in large ag for pool funds. That should provide some easier comps as we move through the course of the year as well. Our expectation is to still maintain that point and a half for large ag price.

Yeah, Kristen, this is Jepsen. I think on the PPA side, you know, that 1.5 for the full year, and I think we would expect that really as we run through the remaining quarters. So not too lumpy or different as we go 2 through 4 Q.

Yeah, maybe just a bit on C&F. You know, we took the guide down slightly. That wasn't a function of our lack of confidence in us being able to execute price increases, really a function of how fast the year started. We announced some price increases in January, and quite frankly, we were surprised at how quickly we had built our backlog in the first couple of months of the year. So the price actions are gonna be delayed a little bit. You know, it's important to keep in mind that, you know, it's Wirtgen, it's parts, and also earthmoving, and so it's a combination. Each one will do a little bit differently, and then over the rest of the year, we'll start to lap some of the more aggressive pricing actions that we had to take last year.

Overall, we still feel very confident in the price realization for the year. Thanks, Kristen.

Our next question comes from Angel Castillo from Morgan Stanley.

Hi, thanks for taking my question. Just wanna maybe follow up on that, if you could just talk a little bit more in detail about what's going on in terms of the order strength, in particular, I guess, on the C&F side, to the comments on the pricing and the strength that you've been surprised by. I recognize it might be difficult to unpack, but just curious if you're seeing if you're able to split that up between what might be, you know, one big beautiful build kind of bonus depreciation related, you know, any kind of versus end-market driven versus kind of gear performance driven by, you know, all the portfolio product innovation you were talking about, or just merchandising incentives.

Just curious, you know, the puts and takes across the various kind of tailwinds that might be driving some of the strength, and if you're able to kind of unpack that.

Yeah, I'll start, Angel, and Ryan, Josh, jump in. I mean, first and foremost, you know, I would just point to, you know, contractor confidence. You know, more and more as we have conversations with contractors. They feel good about their backlog, and candidly, they feel good about that backlog growing even as they look into 2027 as well. So I think it's strength in their end markets and particularly around larger projects. I mean, infrastructure, mega projects, certainly supporting data centers as well, is where we're seeing more of that strength. You know, housing still subdued, yeah, to start the year. You know, some expectation that that'll pick up a little bit as we get some easing as we move through the course of the year.

But that's still a segment, you know, for smaller contractors, where there's still challenge on the housing side. But again, particularly for those larger folks, you know, they're seeing strength in their order book, and I think that's starting to translate into order activity. Yeah, just to add to that, Angel, we've seen, you know, rental repleting, which has been positive. You know, our retails were at mid-teens in the quarter, so we've seen strength there. So not only order activity, but retail, you know, more than matching, which has helped as well. So I think that's given us, you know, more confidence as we've seen that build. Yeah, just maybe to summarize, kind of all of the above, of the things that you identified.

And I've been out quite a bit with customers, you know, geographic mix and a broad swath of the different types of construction, and it's really broad-based. They feel confident. I think the construction activity has been strong the last couple of years. They were probably a little more cautious with respect to fleet for various reasons last year and the year before that, but now the confidence in their backlogs is growing and they need to start making more investments in the fleet. And maybe just one last comment on Wirtgen side, too. We're seeing strength there. We mentioned it's not just concentrated in North America, certainly strong infrastructure investment there, but Europe as well. You know, we're seeing some pickup.

You know, infrastructure in Germany, as an example, has been positive, so, you know, strength in both of those markets as well on the road building side. Thanks, Angel.

Thank you, and Josh, wish you all the best.

Our next question comes from Stephen Volkmann from Jefferies.

Hi. Good morning, everyone. Maybe I'll just stay with this topic. I guess, given what you're—you guys are all saying, which sounds very reasonable, the kind of up to 5% kind of forecast feels pretty conservative. So I'm curious if you think there's some headwinds that we should be keeping in mind, maybe as the year progresses or something. And then sort of on that same note, your net sales forecast in CNF is quite a bit higher than your end market forecast, so maybe you could tease that part out as well.

Yeah. You know, I think you're right, Steve, that there's certainly optimism. You heard us, you know, say that in our prior answer. You know, it is mixed in some segments. You know, housing has still been subdued. You know, so I think that's part of it. But yeah, I mean, overall optimistic, and we're seeing strength there. On the sales guide, you know, up 15, recall that we did some pretty strong order production last year, which has really set us up well, you know, for this upturn. I mean, it was close to 10%, just high single digits for the segment last year, and so we're building in line with retail this year. So that, you know, that is helping.

On top of that, you know, you're getting, you know, 2½ points of price, so getting positive price, and currency has been a tailwind as well. So for all those reasons, you know, we're, we're much closer to 15% now versus, you know, those markets we're seeing are up 5.

Our next question comes from David Raso, from Evercore ISI.

Hi, thank you, and, so we'll, we'll miss you, Jess. When it comes to the large ag commentary, I was intrigued by the order book color. But obviously, you're not willing to change the, the guide on large ag. I was just curious, that order book, is it coming in just, in a sense, earlier than you would have thought, in the sense of you have the same view and the order book just came in at a level where now you feel you have just better visibility? Or are we at the stage where Waterloo or East Moline is starting to, and kind of increase line rates? And I, I'm not just talking seasonality. I'm speaking about versus your original budget.

I'm just curious how you're sort of digesting the at least more stable, better order book on large ag when, as you pointed out, I mean, grain prices... Even this morning, some of the USDA, you know, corn acre number came in, I thought, kind of constructive, but corn is still not reacting positively. And I'm just trying to put together how you're thinking about that order book versus corn prices just aren't really supporting the improvement. Thank you.

Yeah, no, thanks for the question, David. I mean, on the North American side, you know, our guide is still for the industry down 15%-20%. And maybe breaking that down by product lines, you know, our spring seasonal products, things like sprayers and planters, you know, those EOPs, you know, happened over the course of last summer, you know, wrapped up in August, September. Still a lot of uncertainty in the market and, you know, prices for commodities were much lower at the time. You know, those product lines are probably the upper end of that range, closer to 15%. What we've seen over the course of the quarter, I'm sorry, closer to 20%, at the upper end of that range for those product lines.

What we saw over the course of the quarter on the tractor side was some pickup in order velocity, particularly in the last month or so. So we're probably closer to down 15 or so on tractors, the lower end of that range. And then combines, as we mentioned in our commentary, as we close out that EOP, that'll finish better than the range, more like probably down 10-15 for combines in that segment. So yeah, what are we seeing? What's driving that? I mean, as you're right, yeah, I think from a ag fundamental standpoint, still challenged, and haven't seen a whole lot of change there over the course of the quarter.

However, we do feel like things are more stable, certainly than where we were, you know, end of last summer, you know, into the fall. We've seen China come back to the market. You know, we've seen some stability in grain prices. Not a lot of upside at this point in time, to your point, even on some of the recent news, but we've seen some stability there. And then I think the other thing to keep in mind is that, you know, the age of the fleet is getting older. We haven't seen much replacement over the last couple of years, and you do have some folks that do need to look to replace even sort of despite of what we're seeing with ag fundamentals.

When you see an improving used inventory market, and we mentioned some significant improvement even over the course of the quarter. I think most notably, like model year 2022, 2023, 8R's down 20% sequentially in the quarter, just gives you a sense of how those are starting to move. You know, that's starting to free up the trade ladder, you know, free up movement there. And so we are seeing a little bit of pickup from a replacement demand. Not a massive inflection, again, given where the fundamentals are, but replacement does come back over time, just given that situation.

Yeah, Jepsen, the only thing I'd add to that, Dave, to your, to your question is, yeah, we, we are seeing some increased, you know, build rates in, in tractors, and it's kind of back half related to, to this order activity that we saw come through. You know, as Josh mentioned, we're already out, you know, nearly through Q3. So back half of the year, we see some of that step up, but that's based on, you know, actual orders that we're seeing. And I think really underlying some of the replacement that Josh just mentioned. And as we see used get healthier, I think that's aiding that trade ladder, aiding, you know, the ability to, to move those used.

We've seen stability in used prices, and then as you take inventory down, it's facilitating more activity there. Thank you.

Our next question comes from Tim Thein, from Raymond James.

Thank you. Good morning. And yeah, Josh Jepsen, all the best, and thank you for your help over all these many years. Just a question, circling back on kind of the outline as we came into the year with respect to price versus, you know, production costs. Given the maybe slower start to the year in some of these segments, are we - but then you've also mentioned some maybe fluctuations on the cost and tariff side. How has anything changed in terms of the expectation for the full year and how you expect it to play out in terms of price versus cost? Thank you.

Yeah, thanks. Thanks, Tim. I mean, you're right, some changes over the course of the quarter. We're probably closer now to price cost neutral for the full year, just given, you know, particular little bit of a reduction on the pricing side in CNF. You know, tariff costs, and by the way, that price cost neutral is inclusive of the $600 million of incremental tariffs that we're seeing this year, so we're covering that tariff piece coming into the business in 2026. But we've, you know, tariffs have been, you know, roughly flattish quarter-over-quarter. There were some puts and takes there, but, you know, that $1.2 billion for the full year guide on tariffs is still unchanged.

We've seen a little bit of change and maybe a little bit more inflationary pressure on materials, but offset by some improvements, from the overhead side. As we've added volume, we're seeing more overhead efficiency, and so we'll be slightly unfavorable from a production cost standpoint, ex tariffs, but overall, again, price cost neutral, with the price actions that we're taking.

Yeah, and maybe just one thing. You know, first quarter, ex tariffs, we were production cost favorable. So I think it speaks to just the things we can control and how we're operating in an environment with a fair bit of uncertainty.

Our next question comes from Steven Fisher, from UBS.

Thanks. Good morning, and, I echo my, sentiments. Thanks a lot, Josh, really appreciate the help. In terms of some of the, the regional dynamics, I think there were expected to be some pretty big differences between North America and Europe in the first quarter. It sound like maybe North America ended up being a little bit better, on the tractor side, perhaps. Anything in particular from a, a regional production perspective we should be expecting or just general for, for Q2, how to model that and, and any of the differences, for the rest of the year? Because I think those can, certainly affect the, the margin progression in, in large ag.

Yeah. Thanks for the question, Steve. That regional mix was certainly an impact on large ag in the first quarter. I mean, if you look at overall volume in the large ag business in Q1, we were effectively flattish year-over-year in terms of total volume, but that mix was Europe up, you know, Asia, it was a smaller part of our large ag business, but Asia up, and then both North America and South America down year-over-year in Q1. So, given the different, you know, profitability profile, excuse me, for those different geographies, yeah, that was unfavorable mix for us in the first quarter. That starts to change as you move through the course of the year.

I mean, as we'll see it pick up, you know, particularly in North America production here in the second quarter. And as Josh Jepsen mentioned, you know, our order books are for tractors, as an example, now into the fourth quarter. So we've got good confidence that we'll see that pick up, and we'll revert to a more normal mix, going forward, and that will aid margins. I mean, you can expect us in large ag to do double-digit margins, you know, each quarter for the rest of the year. So it really is a mix that's improving as you move through 2026.

Yeah, Steven, I think you see that too, like in gross margins, that, that really rings through. And when you look at the first quarter versus the rest of the year, where we bounce back and looks a lot more like, you know, what do we do for gross margins in PPA, you know, in 2025 and the remainder of the year, that's where it operate. And a big part of that is a little bit more normal mix geographically.

Our next question comes from Chad Dillard, from Bernstein.

Hey, good morning, guys. Got a quick question for you on tariffs. So if we get the tariff relief, will they get rolled back to farmers, and how soon could that happen? Is that something we need to wait to see, until, like, the 27 model year pricing?

Yeah, yeah. And so maybe just to break down a little bit, Chad, on the exposure. So like I mentioned, you know, total tariff costs this year in 2026 is $1.2 billion, pre-tax. And if you break that down, you know, kind of by exposure... The IEEPA tariffs is a little less than half of that, a little bit higher in 232, but a little less than half is IEEPA. So we'll see, you know, what happens on the Supreme Court side. You know, it's been a very dynamic environment, so, you know, it's hard to say if those go away or something else doesn't come back. So yeah, we'll watch how that plays out. We won't react too quickly.

Deere (DE) Q1 2026 Earnings Call Transcript

Company Participants