Deere lifts full-year profit forecast on construction, sales recovery; shares up

Core Viewpoint - Deere & Co has raised its annual profit forecast due to a rebound in construction and small agriculture businesses, alongside cost-cutting measures that have mitigated weak equipment demand, resulting in a 4.7% increase in shares before the bell [1]. Group 1: Financial Performance - The company expects net income for 2026 to range between $4.5 billion and $5 billion, an increase from the previous forecast of $4 billion to $4.75 billion [2]. - Deere reported a net income of $656 million, or $2.42 per share, for the quarter, down from $869 million, or $3.19 per share, a year ago [6]. - First-quarter revenue rose 13% to $9.61 billion, compared to $8.50 billion a year ago [6]. Group 2: Market Conditions - U.S. farmers are facing another season of weak crop prices and elevated costs, leading to difficult operational decisions as grain supplies pressure markets [2]. - The global large agriculture industry continues to face challenges, but there is a recovery in demand within the construction and small agriculture segments [3]. Group 3: Strategic Initiatives - The company is collaborating with dealers to reduce inventory levels in response to market conditions [2]. - Deere anticipates a 15% increase in net sales for the Small Agriculture & Turf and Construction & Forestry segments, up from an earlier forecast of a 10% increase [3]. Group 4: External Factors - U.S. tariffs have negatively impacted operating profits, contributing to higher production costs due to reliance on imported raw materials [4].