John Deere’s construction equipment business remains a financial bright spot as the company reports standout revenue and net income gains in its second quarter, driven by strong spending in the infrastructure and data center markets.
Construction and forestry equipment net sales were up 29% year-over-year in the second quarter to $3.8 billion and up 31% in the first six months of the year to $6.5 billion. Operating profit in this segment was up 48% in the second quarter to $561 million and up 57% in the first half of the year to $698 million.
Deere reported its construction business saw a $191 million sales volume increase in the quarter, alongside an $80 million boost from price realization (the net difference between equipment selling prices in last year’s second quarter versus this year’s second quarter). These gains were partially offset by an $82 million increase in quarterly production costs.
During the earnings call, John Deere Chief Financial Officer Brent Norwood said strong construction equipment demand was being driven by healthy spending on infrastructure and data center construction, as well as rental activity.
“In the U.S. and Canada, our order book continues to strengthen, up more than 60% since November, now at its highest level since April of 2024, with over 80% of production slots filled for the year,” said Norwood.
In Deere’s largest business segment, agriculture equipment, net sales were down 14% in the second quarter to $4.5 billion, while operating profit in the quarter fell 39% to $706 million. For the first half of the year, Deere’s agriculture net sales dropped 8% to $7.7 billion, and operating profit declined 43% to $845 million.
Key negative driving factors in Deere’s ag business were a $402 million decline in equipment shipment volumes and an added $77 million in production costs.
Consolidated net sales and revenue among all Deere’s segments were up 5% year-over-year in the second quarter to $13.7 billion and up 8% for the first half of the fiscal year to just under $23 billion. Consolidated net income saw declines, however, falling 2% in the quarter to $1.8 billion and 9% in the last 6 months to $2.4 billion.
For its full 2026 fiscal year, Deere forecasts construction net sales will be up around 20% year-over-year.
Deere also reported U.S. Customs and Border Protection had accepted the company’s recovery claim of $272 million related to IEEPA tariffs, after the Supreme Court declared them illegal in February.
