Deere & Company is a global leader in the delivery of agricultural, turf, construction, and forestry equipment, and the question for the next twelve months is whether the company can convert the $1.379 billion Q3 FY2026 net income up 7% year over year, the $5.10 Q3 FY2026 fully diluted EPS up 7% year over year, the $12.608 billion Q3 FY2026 worldwide net sales and revenues up 5% year over year, the $35.589 billion first nine months of FY2026 worldwide net sales and revenues up 7% year over year, the $10.999 billion Q3 FY2026 net sales, the $30.779 billion first nine months of FY2026 net sales, the $3.998 billion Q3 FY2026 Production & Precision Agriculture net sales down 6% year over year, the $527 million Q3 FY2026 Production & Precision Agriculture operating profit down 9% year over year, the 13.2% Q3 FY2026 Production & Precision Agriculture operating margin, the 3.2% Q3 FY2026 Production & Precision Agriculture operating margin compression, the $3.383 billion Q3 FY2026 Small Agriculture & Turf net sales up 12% year over year, the $622 million Q3 FY2026 Small Agriculture & Turf operating profit up 28% year over year, the 18.4% Q3 FY2026 Small Agriculture & Turf operating margin, the 2.4% Q3 FY2026 Small Agriculture & Turf operating margin expansion, the $3.618 billion Q3 FY2026 Construction & Forestry net sales up 18% year over year, the $436 million Q3 FY2026 Construction & Forestry operating profit up 84% year over year, the 12.1% Q3 FY2026 Construction & Forestry operating margin, the 4.4% Q3 FY2026 Construction & Forestry operating margin expansion, the $219 million Q3 FY2026 Financial Services net income up 7% year over year, the $110 million Q3 FY2026 tariff recoveries, the $382 million first nine months FY2026 tariff recoveries, the $3.808 billion first nine months of FY2026 net income, the $14.06 first nine months of FY2026 fully diluted EPS, the $4.75 billion to $5.00 billion fiscal 2026 net income guidance, the 2026 as the bottom of the ag equipment cycle, the early order program trends, the improving used-equipment inventories, the increasing customer adoption of advanced technologies, the disciplined execution by our teams, the continued resilience across our portfolio, the stable U.S. market conditions, the ability to manage softer conditions in Brazil and Europe, the commitment to helping customers succeed, the large ag down 15 to 20%, the small ag & turf flat to up 5%, the Europe flat, the South America tractors & combines down 15 to 20%, the Asia flat, the construction equipment up 5 to 10%, the U.S. & Canada large ag down 15 to 20%, the U.S. & Canada small ag & turf flat to up 5%, the U.S. & Canada construction equipment up 5 to 10%, and the broader Deere positioning into the kind of Cycle-Bottom and Construction-&-Forestry-Surge operating leverage the company has been telegraphing. The Q3 FY2026 print was the cleanest test of that thesis, and the cleanest signal is that Chairman and CEO John C. May said "Deere delivered a strong quarter, reflecting disciplined execution by our teams and continued resilience across our portfolio. Our performance underscores the strength of our business, supported by stable U.S. market conditions, our ability to manage softer conditions in Brazil and Europe, and our commitment to helping customers succeed. As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle. Across our business, early order program trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation." The strategic tension is the 2026 as the bottom of the ag equipment cycle against the Construction & Forestry +18% surge, and the forward question is whether the Construction & Forestry surge and the Small Agriculture & Turf strength can compound the cycle-bottom setup into the fiscal 2026 guidance the company has been telegraphing.
The $1.379 billion Q3 FY2026 net income and the 7% year-over-year growth are the cleanest read on the operating momentum, and the 2026 as the bottom of the ag equipment cycle is the proof. The Q3 FY2026 net income of $1.379 billion grew 7% above the prior-year quarter's $1.289 billion. The Q3 FY2026 fully diluted EPS of $5.10 grew 7% above the prior-year quarter's $4.75.
The Q3 FY2026 worldwide net sales and revenues of $12.608 billion grew 5% above the prior-year quarter's $12.018 billion. The first nine months of FY2026 worldwide net sales and revenues of $35.589 billion grew 7% above the prior-year period's $33.290 billion. The Q3 FY2026 net sales of $10.999 billion grew above the prior-year quarter's $10.357 billion.
The Q3 FY2026 Production & Precision Agriculture net sales of $3.998 billion declined 6% below the prior-year quarter's $4.273 billion, the Q3 FY2026 Production & Precision Agriculture operating profit of $527 million declined 9% below the prior-year quarter's $580 million, the Q3 FY2026 Production & Precision Agriculture operating margin of 13.2% was 40 basis points below the prior-year quarter's 13.6%, the Q3 FY2026 Small Agriculture & Turf net sales of $3.383 billion grew 12% above the prior-year quarter's $3.025 billion, the Q3 FY2026 Small Agriculture & Turf operating profit of $622 million grew 28% above the prior-year quarter's $485 million, the Q3 FY2026 Small Agriculture & Turf operating margin of 18.4% was 240 basis points above the prior-year quarter's 16.0%, the Q3 FY2026 Construction & Forestry net sales of $3.618 billion grew 18% above the prior-year quarter's $3.059 billion, the Q3 FY2026 Construction & Forestry operating profit of $436 million grew 84% above the prior-year quarter's $237 million, the Q3 FY2026 Construction & Forestry operating margin of 12.1% was 440 basis points above the prior-year quarter's 7.7%, the Q3 FY2026 Financial Services net income of $219 million grew 7% above the prior-year quarter's $205 million, the $110 million Q3 FY2026 tariff recoveries, the $382 million first nine months FY2026 tariff recoveries, the $3.808 billion first nine months of FY2026 net income, the $14.06 first nine months of FY2026 fully diluted EPS, the $4.75 billion to $5.00 billion fiscal 2026 net income guidance, the 2026 as the bottom of the ag equipment cycle, the early order program trends, the improving used-equipment inventories, the increasing customer adoption of advanced technologies, the disciplined execution by our teams, the continued resilience across our portfolio, the stable U.S. market conditions, the ability to manage softer conditions in Brazil and Europe, the commitment to helping customers succeed, the U.S. & Canada large ag down 15 to 20%, the U.S. & Canada small ag & turf flat to up 5%, the U.S. & Canada construction equipment up 5 to 10%, the Europe flat, the South America tractors & combines down 15 to 20%, the Asia flat, the Construction & Forestry U.S. & Canada construction equipment up 5 to 10%, the Moline, Illinois corporate headquarters, the global leader in the delivery of agricultural turf construction and forestry equipment positioning, the Deere positioning, and the underlying operating profile is the cleaner read on the segment-level performance the company is producing.
The strategic question the company is working through in FY2026 is the Cycle-Bottom pivot and the Construction-&-Forestry-Surge positioning. The CEO commentary in the most recent earnings release described the company as having "Deere delivered a strong quarter, reflecting disciplined execution by our teams and continued resilience across our portfolio. Our performance underscores the strength of our business, supported by stable U.S. market conditions, our ability to manage softer conditions in Brazil and Europe, and our commitment to helping customers succeed" and as "as we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle. Across our business, early order program trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation." The CFO commentary described the company as having "worldwide net sales and revenues increased 5 percent, to $12.608 billion, for the third quarter of 2026 and rose 7 percent, to $35.589 billion, for nine months. Net sales were $10.999 billion for the quarter and $30.779 billion for nine months" and that "net income attributable to Deere & Company for fiscal 2026 is forecasted to be in a range of $4.75 billion to $5.00 billion." The strategic intent is to position the company for the Cycle-Bottom pivot and the Construction-&-Forestry-Surge positioning, and the strategic intent is the source of the operating profile the company is producing.
The macro context the company is operating in is the broader global agricultural equipment market, with the global agricultural equipment market showing modest growth driven by the 2026 as the bottom of the ag equipment cycle, with the U.S. agricultural equipment market showing modest growth, and with the broader global construction and forestry equipment market showing meaningful growth. The macro context is the source of the $12.608 billion Q3 FY2026 worldwide net sales and revenues, the 5% Q3 FY2026 worldwide net sales and revenues year over year growth, and the 18% Q3 FY2026 Construction & Forestry net sales year over year growth the company is producing, and the macro context is mixed for the global agricultural equipment operating profile.
The shareholder return program is the second structural feature, with the company paying a regular quarterly cash dividend and executing the share repurchase program. The quarterly cash dividend and the share repurchase program are the cleanest single read on the capital-return profile the company is producing.