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Call sheet · Q1'26

Deere (DE)

Q1'26 earnings call · held February 19, 2026 · compared with the Q4'25 call · management-credibility review
10/12
Disclosure score
2 medium, 5 low flags
Financial quality
Bottom line
The sleeper story is Construction & Forestry printing money with 50% order growth while everyone obsesses over ag cycles - this business is becoming a technology-enabled services play with the Tenna acquisition creating mixed-fleet software revenue streams. The obvious headline is large ag stabilizing with order books through Q4, but the binding constraint is management's chronic conservatism - they're clearly seeing better order velocity than the 15-20% down guide implies. Most revealing quote: 'We saw a really good progress in the first quarter' and 'order velocity for North American row crop tractors has increased' - classic DE code for 'things are getting better but we won't say how much.' My view changes if C&F margins hit the high end of 9-11% guidance or if they quantify the scale of large ag order acceleration next quarter.

The 30-second version

  • Construction segment quietly printing money while everyone obsesses over ag
  • Large ag finally showing replacement demand but they're being coy about scale
  • Tariff mitigation progress mysteriously absent from the narrative

What changed this quarter

MetricQ4'25Q1'26Change
Equipment Operations Net Sales$8.5B (Q4 2025, +14% YoY)$8.0B (Q1 2026, +18% YoY)+18% growth accelerating from easier comps
Equipment Operations Operating Margin9.2% (Q4 2025)5.9% (Q1 2026)-330bps sequential decline on mix and tariffs
Production & Precision Ag Net Sales$4.74B (Q4 2025, +10% YoY)$3.16B (Q1 2026, +3% YoY)Growth decelerated 700bps
Production & Precision Ag Operating Margin12.7% (Q4 2025)4.4% (Q1 2026)-830bps sequential collapse on regional mix
Small Ag & Turf Net Sales$2.46B (Q4 2025, +7% YoY)$2.17B (Q1 2026, +24% YoY)+1,700bps acceleration
Small Ag & Turf Operating Margin1.0% (Q4 2025)9.0% (Q1 2026)+800bps improvement
Construction & Forestry Net Sales$3.38B (Q4 2025, +27% YoY)$2.67B (Q1 2026, +34% YoY)+700bps acceleration despite seasonality
Construction & Forestry Operating Margin10.3% (Q4 2025)5.1% (Q1 2026)-520bps seasonal decline but volumes strong
Net Income$1.1B (Q4 2025)$656M (Q1 2026)-40% sequential decline on seasonal mix
Equipment Operations Cash Flow$5.1B (FY 2025)$4.5-5.5B guide (FY 2026)+$500M increase at midpoint vs prior guide

Accountability tracked

8 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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