John Deere’s construction and forestry equipment business remains a financial bright spot for the company, as its third-quarter earnings reveal net sales gains, while its larger ag equipment segment continues to struggle.
Construction and forestry equipment net sales were up 18% year-over-year in the third quarter to $3.6 billion and up 26% in the first nine months of the year to $10.1 billion. Operating profit for the segment was up 84% in the third quarter to $436 million and up 67% year-to-date to $1.1 billion.
Deere reported its construction business saw a $244 million boost from price realization (the net difference between equipment selling prices in last year’s second quarter versus this year’s second quarter) and a $22 million increase in sales volume. These gains were partially offset by a $65 million increase in selling, administrative and general expenses, as well as research and development expenses.
In the second quarter, John Deere sold 5,994 new financed construction machines in the U.S., according to EDA equipment finance data. Popular models included the 325G compact wheel loader, the 333 P-Tier compact track loader and the 35 P-Tier compact excavator. (EDA is owned by Fusable, which also owns Equipment World).
Powered byDuring the earnings call, Manager of Investor Communications Dan Pooley said the company expects 2026 earthmoving equipment sales in North America to rise 5%-10% and compact construction equipment sales to rise 5%. Deere said the projections are driven by strong demand from large-scale infrastructure, data center and energy-related projects and continued investment in rental fleets.
In Deere’s largest business segment, agriculture equipment, net sales were down 6% in the third quarter to $4 billion, while operating profit in the quarter fell 9% to $527 million. For the first nine months of the year, Deere’s agriculture net sales dropped 7% to $11.7 billion, and operating profit declined 34% to $1.4 billion.
Key negative driving factors in Deere’s ag business were a $124 million decline in equipment shipment volumes and an added $95 million in production costs.
Consolidated net sales and revenue among all Deere’s segments were up 5% year-over-year in the third quarter to $12.6 billion and up 7% for the first nine months of the fiscal year to $35.6 billion. Consolidated net income was up 7% in the second quarter to $1.4 billion but down 4% year-to-date to $3.8 billion.
John Deere also recorded tariff refunds in the third quarter and first nine months of 2026 of $110 million and $382 million, respectively.
For its full 2026 fiscal year, Deere still forecasts construction net sales will be up around 20% year-over-year, with price realization in particular expects to rise around 3%.
