Deere Drops Despite Q4 Beat

Deere (DE) fell roughly 4% in premarket trading after its fourth-quarter results, as investors focused on a softer full-year 2026 profit outlook and ongoing tariff pressures that continue to drag on margins.

Q4 Results Beat Expectations

Deere outperformed Wall Street estimates for the quarter:

Adjusted EPS: $3.93 (vs. $3.84 expected)
Total Revenue: $12.4B, beating estimates by more than 5%
Construction & Forestry Division: Net sales surged 27%, though profitability was constrained by tariffs

Weak 2026 Profit Guidance Concerns Investors

Despite the Q4 beat, the full-year guidance disappointed:

2026 profit forecast: $4.0B–$4.75B
Analysts were expecting over $5B
Management cited ongoing tariff-related margin pressure and persistent weakness in the large agriculture sector

CEO John May warned that:

Tariffs remain a “significant margin headwind”
2026 likely represents the bottom of the large ag cycle
Cost-control measures should position Deere for recovery once market conditions improve

Tariffs Continue to Pressure Margins

Across divisions, tariff costs remained a consistent challenge:

Construction & Forestry saw strong revenue growth but weaker operating margins
Large agriculture equipment demand continues to soften
Management expects conditions to remain challenging through 2026

Market Reaction

Shares slipped 4% premarket, despite operational strength
Investors viewed the guidance cut as a sign of prolonged macro and tariff pressure into 2026