Rising U.S. government and private spending on infrastructure alongside the vast AI-fueled buildout of data centers has lifted demand for construction equipment, with Deere's construction and forestry segment emerging as its fastest-growing business. Net sales in the segment rose 18% from a year earlier.
The trend has helped the company weather a prolonged lull in demand for its large tractors and combine harvesters amid rising costs and falling agricultural yields.
Deere's Small Ag & Turf segment — home to low horsepower tractors often used in dairy farming — posted a 12% rise in net sales, with demand aided by improving prices for milk and beef.
Revenue at its mainstay Production & Precision Agriculture segment, which includes its large green tractors and combine harvesters, dropped 6% from a year earlier. CEO John C. May, however, said Deere continues "to believe 2026 will mark the bottom of the current ag equipment cycle."
The company reported a profit of $5.10 per share for the quarter ended August 2, up from $4.75 per share a year earlier and above analysts' estimates of $4.70 per share, according to data compiled by LSEG.
Its quarterly revenue rose 6% to $11 billion, also beating expectations of $10.73 billion.
Deere's quarterly profit rise was aided by a tariff refund of $110 million during the quarter.
The John Deere tractor manufacturer now expects 2026 net income of $4.75 billion to $5 billion, compared with its earlier projection of $4.5 billion to $5 billion. The midpoint of the new range is in line with Wall Street expectations.
Shares of the company were up 1% in premarket trading, after jumping about 6% earlier in the day.
