**Beta Finch Podcast Script: Deere Q1 2026 Earnings**
ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and I'm joined as always by Jordan. Today we're digging into Deere & Company's first quarter 2026 results - and folks, this is a company that's showing some real signs of life after what's been a pretty challenging agricultural cycle.
JORDAN: That's right, Alex. And before we dive in, I want to make sure our listeners know that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.
ALEX: Thanks, Jordan. Now, let's talk numbers because Deere really impressed here. They posted $9.6 billion in net sales and revenues, up 13% year-over-year, with equipment operations specifically growing 18% to $8 billion. Net income came in at $656 million, or $2.42 per share.
JORDAN: What I found particularly encouraging is that they beat their own expectations across the board. Management said all business segments performed ahead of plan, driven primarily by better-than-expected shipment volumes. And here's the kicker - they're calling 2026 the bottom of the current agricultural cycle.
ALEX: That's huge, Jordan. Let's break down the segments because there are some really interesting dynamics here. Small Ag & Turf was the star performer with 24% growth to $2.2 billion in sales and a 9% operating margin. Meanwhile, Construction & Forestry jumped 34% to $2.7 billion.
JORDAN: The Construction & Forestry story is particularly compelling. Their order bank has risen by over 50% in just the past quarter - that's the highest level since May 2024. Management is seeing strength across infrastructure projects, data center construction, and rental re-fleeting. It's giving them clear visibility into the second half of the fiscal year.
ALEX: And that's translating into some serious guidance raises. They bumped their Construction & Forestry net sales forecast to up around 15% for the full year, with operating margins now expected between 9-11%. But what really caught my attention was the Large Ag discussion.
JORDAN: Right, so Large Ag has been the problem child for Deere, but there are green shoots emerging. While the North American Large Ag industry is still expected to decline 15-20% this year, management noted that large tractor order velocity has picked up, and their rolling order books now provide visibility into the fourth quarter.
ALEX: The used inventory story is fascinating too. They've made significant progress reducing used equipment inventory - model year 2022 and 2023 8R tractors are down over 40% from their peak, and just in this quarter alone, they dropped 20% sequentially. That's clearing the trade ladder and enabling more replacement demand.
JORDAN: Let's talk about some of the strategic moves they're making. The big announcement is their new Deere-designed 20-ton class excavators launching at CONEXPO. This is their first fully Deere-designed and North Carolina-built excavator line, targeting about 40% of the North American construction equipment market.
ALEX: And they completed the acquisition of Tenna, which is all about digitizing construction workflows and fleet management. This fits into their three-layer strategy: machines, tasks, and job sites. They want to help contractors optimize not just individual machines, but entire operations.
JORDAN: The technology adoption numbers are impressive too. They now have over 500 million engaged acres - that's up 10% from a year ago, with nearly a third being "highly engaged." On the combine side, 99% of combines ordered through their early order program had some level of harvest automation, with nearly 80% taking the ultimate package.
ALEX: Now, it wasn't all sunshine and rainbows. They're dealing with $1.2 billion in tariff costs this year, and there are some reg
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Mar 21 20269 mins