John Deere’s financial services net income rises 6.1% YoY

Deere & Co.’s financial services net income increased in its first quarter as improved financing spreads and lower credit costs offset continued pressure in large agriculture.

The Moline, Ill.-based OEM reported net income of $656 million for the quarter ended Feb. 1, down 24.5% year over year, according to today’s earnings release. Worldwide net sales and revenues rose 13% YoY to $9.61 billion from $8.51 billion.

Financial services net income rose to $244 million, up 6.1% YoY, while financial services operating profit increased 13.2% YoY to $301 million, driven primarily by favorable financing spreads and a lower provision for credit losses, according to the release. Provision for credit losses, as a percentage of its portfolio, landed at 0.07% in Q1, down 7 basis points YoY, according to an Equipment Finance News analysis of the company’s earnings.

Deere also posted:

• Production and Precision Agriculture net sales increased 3.1% YoY to $3.16 billion;
• Small Agriculture and Turf net sales rose 24% YoY to $2.17 billion; and
• Construction and Forestry net sales climbed 33.9% YoY to $2.67 billion.

Outlook

Deere increased its fiscal 2026 net income guidance to a range of $4.5 billion to $5 billion, according to the release. The company projects financial services net income of approximately $840 million for fiscal year 2026.

Industry outlook for fiscal 2026 calls for U.S. and Canada large agriculture to decline 15% to 20% YoY, while U.S. and Canada construction equipment markets are expected to increase about 5%, according to the release.

Shares of Deere & Co. [Nasdaq: DE] were trading at $662 at market close today, up 11.6% or $68.73 from market open. Deere has a market capitalization of $160.82 billion. 

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