Deere & Company (DE  ) stock is trading higher Thursday after the company reported fiscal third-quarter results that beat Wall Street expectations and raised its full-year net income outlook. Deere reported net income of $1.379 billion, or $5.10 per diluted share, compared with $1.289 billion, or $4.75 per share, a year earlier.

Earnings of $5.10 per share beat the $4.70 estimate. Net sales and revenue rose 5% to $12.608 billion, topping the $10.730 billion estimate.

Segment Performance

Production & Precision Agriculture net sales fell 6% to $3.998 billion. Operating profit declined 9% to $527 million, while operating margin narrowed to 13.2% from 13.6%.

Favorable pricing and currency effects partly offset lower shipment volumes and higher production costs.

Small Agriculture & Turf net sales rose 12% to $3.383 billion. Operating profit increased 28% to $622 million, while margin expanded to 18.4% from 16%.

Construction & Forestry net sales jumped 18% to $3.618 billion. Operating profit surged 84% to $436 million, while margin improved to 12.1% from 7.7%.

A Reuters report said rising U.S. infrastructure spending and the AI-driven data center buildout are fueling construction equipment demand, providing Deere with a key growth engine as demand for large tractors and combines remains weak.

Financial Services net income increased 7% to $219 million.

Cash Flow And Special Items

Operating cash flow totaled $3.250 billion for the first nine months of the fiscal year. Deere ended the quarter with $8.928 billion in cash and cash equivalents.

The company reported $17.115 billion in short-term borrowings, $6.095 billion in short-term securitization borrowings and $40.626 billion in long-term borrowings.

Deere recorded $110 million in tariff recoveries during the quarter and $382 million year to date. The year-ago quarter included a $61 million pretax noncash impairment charge.

The company also completed its $439 million acquisition of Tenna LLC, expanding its construction technology capabilities.

Deere Raises 2026 Outlook

Deere raised its fiscal 2026 net income outlook to between $4.75 billion and $5 billion. It expects equipment operations net operating cash flow of $5 billion to $5.5 billion.

The company projects capital expenditures of about $1.3 billion and expects research and development expenses to increase slightly.

  • Production & Precision Agriculture sales are expected to fall about 10%, with margins of 11% to 12%.
  • Small Agriculture & Turf sales are projected to rise about 15%, with margins of 14.5% to 15.5%.
  • Construction & Forestry sales are expected to grow about 20%, with margins of 10.5% to 11.5%.
Deere expects large-agriculture industry volumes in the U.S. and Canada to decline 15% to 20%. Construction equipment volumes are expected to rise 5% to 10%, while global roadbuilding volumes are projected to increase about 10%.

The company said early order trends, improving used-equipment inventories and greater adoption of its technology support its view that 2026 will mark the bottom of the agricultural equipment cycle.

"As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle," Chairman and CEO John C. May said.

"Across our business, early order program trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation."

DE Price Action: Deere shares were up 2.76% at $596.67 at the time of publication on Thursday, according to Benzinga Pro data.