“We would like to highlight that our implied midpoint guidance of approximately $16 in earnings per share reflects sub-draft conditions in PPA, with projected fiscal year 2026 sales at less than 80% of mid-cycle levels.”

In context

“guidance for net income, effective tax rate, and operating cash flow. Josh Beal: For fiscal year 2026, our full-year net income forecast is expected to be in the range of $4 billion and $4.75 billion. Included in this estimate is projected pretax direct tariff expense of approximately $1.2 billion, with additional inflationary pressures also contemplated from the direct and indirect impacts of tariffs. Christopher Seibert: Next, our guidance incorporates an effective tax rate between 25-27%, which is higher year over year as a result of fewer discrete items and a less favorable geographic mix driven by projections for a higher percentage of income coming from outside the United States. Lastly, cash flow from equipment operations is projected to be in the range of $4 billion to $5 billion. We would like to highlight that our implied midpoint guidance of approximately $16 in earnings per share reflects sub-draft conditions in PPA, with projected fiscal year 2026 sales at less than 80% of mid-cycle levels. This level of performance reflects the structural improvements we have made to the business over the last several years. Our ongoing efforts to manage the cycle through proactive inventory management and cost control and the resilience that comes from a more diversified business as both Small Ag and Turf and Construction Forestry are projected to grow in 2026. This concludes our formal remarks. We'll now cover a few topics before opening the line for Q&A. But before we get into the details, John, would you like to share your thoughts on the year? John May: Thanks, Chris. 2025 marked a year of significant challenges and uncertainty, but it also reflected the resilience and strength of the Deere organization as we continue to demonstrate structurally higher performance levels while making s”