Deere’s first quarter results outpaced Wall Street expectations on both revenue and profit, yet the market responded negatively, with shares declining sharply. Management attributed the quarter’s performance to strong demand in construction and small agriculture equipment, alongside positive impacts from one-time tariff refunds. However, elevated production costs and persistent margin headwinds, especially in the large agriculture segment, weighed on operating profitability. CFO Josh Beal emphasized, “Our second quarter came in largely in line with expectations for both top line and margin across all business segments, with the overall equipment operations achieving margins of 16.9%.”

Is now the time to buy DE? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Deere’s Q1 Earnings Call

• Paddy Bogart (Melius Research) asked if Deere’s construction sales outperformance reflected market share gains or industry growth. CFO Josh Beal cited both past underproduction catch-up and recent share gains supported by pricing adjustments.

• Sherri Scribner (Jefferies) requested a breakdown of the $272 million tariff refund across segments. Beal explained about half benefited construction and forestry, 30% went to small ag and turf, and 20% to large ag.

• Esther Castillo (Morgan Stanley) inquired about downside risks to the ag cycle and regional outlook given geopolitical uncertainty. Beal pointed to rising fleet ages and healthier used inventory as supporting baseline recovery next year, but noted ongoing margin pressures from input costs.

• Kristen Owen (Oppenheimer) asked about order trends for large ag seasonal products by region. Beal said early order programs are closed for this year and initial signals for next year support management's view that the market is at a cyclical trough.

• Jerry Revich (Wells Fargo) pressed on adoption and renewal rates for new precision ag technologies. Beal reported strong customer utilization, with renewal rates for multi-year users exceeding 90%.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be monitoring (1) Deere’s ability to manage persistent tariff and input cost pressures while sustaining profitability, (2) signs of recovery in large agriculture equipment demand as fleet replacement cycles progress, and (3) continued progress in expanding precision agriculture technology adoption and digital platform engagement. Execution in these areas will be critical for supporting long-term growth and margin improvement.

Deere currently trades at $529.28, down from $560.46 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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