By Nicholas G. Miller

Deere raised its fiscal-year outlook and said demand in the construction and small agriculture markets was recovering.

The company posted first-quarter net income of $656 million, or $2.42 a share, down from $869 million, or $3.19 a share, the year before. Analysts polled by FactSet had expected $2.02 a share.

Net sales and revenue rose 13% to $9.61 billion, boosted by a 34% increase in net sales for its construction and forestry division and 24% net sales growth for its small agriculture and turf segment.

The company raised its fiscal-year net income guidance to $4.5 billion to $5 billion, up from its previous forecast of $4 billion to $4.75 billion. Analysts see $4.43 billion.

Deere also now sees small agriculture and turf and construction and forestry net sales each increasing 15% for the fiscal year, up from its prior forecast of 10% growth for both segments. It reiterated its outlook for production and precision agriculture net sales to be down 5% to 10%.

"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," said Chief Executive John May.

Deere has struggled from an extended slowdown in the tractor business with farmers cutting back on big-ticket purchases amid challenging farm fundamentals and elevated interest rates.

Meanwhile, the company has also been coping with rising tariff costs that have dragged down profit. Deere said in November that it expects tariff costs of about $300 million a quarter during fiscal 2026, or $1.2 billion for the year, up from $600 million in fiscal 2025.

Write to Nicholas G. Miller at nicholas.miller@wsj.com

(END) Dow Jones Newswires

February 19, 2026 06:36 ET (11:36 GMT)

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