Beta Finch - S&P 100 - EN

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**BETA FINCH PODCAST SCRIPT**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and I'm here with my co-host Jordan to dive into EOG Resources' first quarter 2026 earnings call. This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks, Alex. And wow, what a quarter for EOG! They're definitely benefiting from some major geopolitical tailwinds, but there's a lot more substance here than just riding the oil price wave.

**ALEX:** Absolutely. Let's start with the numbers because they're pretty impressive. EOG generated $1.8 billion in adjusted net income and $1.5 billion in free cash flow for the quarter. They returned nearly $950 million to shareholders through dividends and buybacks. Jordan, what jumped out at you?

**JORDAN:** The cash flow generation is remarkable, especially when you consider they're projecting a record $8.5 billion in free cash flow for the full year 2026. But here's what I found fascinating - they're maintaining their $6.5 billion capital budget while increasing oil production guidance by 2,000 barrels per day and NGL production by 6,000 barrels per day. That's capital discipline in action.

**ALEX:** That's a great point about capital discipline. They're essentially reallocating capital from natural gas assets to oil-weighted assets within the same budget. CEO Ezra Yacob was pretty clear about this being a response to current market dynamics - oil prices surging due to the Iran conflict while natural gas prices remain soft.

**JORDAN:** Right, and let's talk about that geopolitical situation because it's driving a lot of their strategy. The conflict has removed an estimated 900 million barrels from global markets through June 2026, and EOG's management seems to believe this sets up a higher oil price floor going forward, even after the conflict resolves.

**ALEX:** The international expansion story is interesting too. They've got operations starting up in both the UAE and Bahrain. During the Q&A, management mentioned they're seeing strong partnerships with ADNOC and BAPCO, and they expect initial results from these exploration programs in the second half of 2026.

**JORDAN:** And their marketing strategy is really paying dividends - literally. They have 250,000 barrels per day of export capacity out of Corpus Christi, which gives them flexibility to price crude domestically or link to Brent pricing. Plus, their Cheniere LNG contract is expanding to 420,000 BTUs per day, with pricing linked to either JKM or Henry Hub at their election.

**ALEX:** That pricing flexibility is huge in volatile markets. CFO Ann Janssen mentioned they've been able to sell multiple cargoes at attractive pricing thanks to that export capacity. It's like having optionality built into their business model.

**JORDAN:** Speaking of Ann Janssen, let's talk shareholder returns because this is where things get really interesting. They're committed to returning at least 70% of free cash flow this year, which would be a record. And they've been aggressive on buybacks - 3.2 million shares in Q1, plus another 2.3 million shares just in April.

**ALEX:** The buyback strategy seems pretty opportunistic. During the Q&A, there was this great exchange about being tactical versus having a ratable program throughout the year. Management seems confident they're finding value in their own stock, even with oil prices elevated.

**JORDAN:** What I found telling was CEO Yacob's comment about potentially building some cash on the balance sheet during this upcycle to prepare for countercyclical investments when prices eventually pull back. That's exactly what they did with acquisitions like Encino

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**Beta Finch Podcast Script: EOG Resources Q4 2025 Earnings**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we dive into the numbers that move markets. I'm Alex, and joining me as always is Jordan. Today we're unpacking EOG Resources' fourth quarter 2025 results - and folks, this was a masterclass in disciplined capital allocation and cash generation.

Before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex. EOG really delivered what their shareholders have come to expect - consistent execution and massive cash returns. They generated $4.7 billion in free cash flow for 2025 and returned 100% of it to shareholders through dividends and buybacks. That's $2.2 billion in regular dividends plus $2.5 billion in share repurchases.

**ALEX:** Those are impressive numbers. And what caught my eye is they've now generated annual free cash flow every single year since 2016 and haven't cut their dividend in 28 years. Talk about reliability in a volatile sector. What were the key operational drivers behind these results?

**JORDAN:** The story really centers around their multi-basin approach paying off. They exceeded their original oil and total volume targets while keeping capital expenditures in line. But the real magic happened in cost reduction - they drove well costs down 7% in 2025 through what they call "sustainable efficiency gains." That's huge because these savings compound over time as they develop each asset.

**ALEX:** Let's talk about that Encino acquisition they completed. This was a big strategic move for them in the Utica shale.

**JORDAN:** Absolutely transformational, Alex. They hit their $150 million synergy target ahead of their original one-year timeline, and they're not done yet. The numbers Jeff Leitzell shared were pretty remarkable - they increased drilling speed by over 35%, reduced casing costs by 30%, and brought well costs down below $600 per foot. They're even planning to have in-basin sand sourcing in Ohio by year-end, which should drive costs even lower.

**ALEX:** That integration ahead of schedule really shows their operational expertise. Now, one area that seemed to generate some investor questions was their Delaware Basin strategy. Can you break down what's happening there?

**JORDAN:** This is interesting and I think it highlights EOG's technical sophistication. They've actually unlocked nine additional landing zones in the Delaware Basin due to their dramatic cost reductions over the past few years. So while some individual wells might show lower productivity per foot, the economics are still hitting their return hurdles because the wells cost so much less to drill.

**ALEX:** So it's not about well degradation - it's about accessing previously uneconomic zones?

**JORDAN:** Exactly. CEO Ezra Yacob was pretty clear about this - they're co-developing multiple targets now that previously didn't meet their stringent return requirements. Some have lower productivity, some have different gas-oil ratios, but each delivers the high returns shareholders expect. They're optimizing recovery per acre and maximizing NPV, not just chasing the highest initial production rates.

**ALEX:** That makes sense from a capital allocation standpoint. Speaking of their portfolio, they're also elevating Dorado to what they call a "foundational asset" alongside the Delaware Basin, Utica, and Eagle Ford. What's the story there?

**JORDAN:** Dorado is their South Texas gas play, and the progress has been remarkable. They've driven well costs down to $750 per foot with a breakeven of just $1.40 per thousand cubic feet. They exit

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown. Today we're digging into Duke Energy's second quarter 2026 results. Duke's the largest regulated utility fleet in the country, so this one's worth paying attention to.

Before we dive in, a quick note: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Alright, let's get into the numbers. Duke posted adjusted EPS of $1.43 for Q2, up nicely from $1.25 a year ago. Reported EPS came in at $1.38.

ALEX: And the growth story here is pretty straightforward — electric utilities and infrastructure added $0.15 year-over-year, driven by customer growth and all the infrastructure investment they're pouring into their service territories. Gas utilities were roughly flat, which management chalked up to it just being a seasonally quiet quarter.

JORDAN: Worth flagging — favorable weather helped too. Cold first quarter, hot second quarter, and Duke's generating fleet cashed in on that demand. CFO Brian Savoy actually said they might reinvest some of that weather upside back into their generating facilities in the back half of the year. That's a smart move — banking some of the windfall into asset reliability rather than just letting it flow straight to the bottom line.

ALEX: Big picture, they reaffirmed full-year guidance of $6.55 to $6.80 in adjusted EPS, and they're sticking with their long-term target of 5% to 7% EPS growth through 2030. But here's the headline: management said they're increasingly confident they'll land in the top half of that range starting in 2028.

JORDAN: That 2028 timing matters. That's when the big economic development projects — mainly data centers — start ramping up under their electric service agreements, or ESAs. Duke's now signed 7.8 gigawatts of these agreements, and they're targeting the full 15.4 gigawatt pipeline to convert by the first half of 2027.

ALEX: Let's talk about the capital side because it's massive. Duke's running what they call the industry's largest regulated capital plan — over a billion dollars a month going into the ground. And on top of the existing five-year plan, they flagged another $5 to $10 billion of potential upside, mostly tied to new generation and transmission needs in Indiana and Florida as more of these large-load contracts get signed.

JORDAN: That's a real growth lever, but I want to highlight something else — the regulatory side. Duke reached a settlement in North Carolina on their DEC rate case: 9.8% ROE, 53% equity layer, and they kept an earnings sharing mechanism that lets them earn up to 10.3% ROE if they outperform. They're now trying to reach a similar settlement for the DEP case, with a hearing scheduled and orders expected by mid-November on both.

ALEX: Constructive regulatory outcomes are the backbone of the utility thesis, and Duke's track record here is strong. They also rolled out something called the Customer Protection Plus commitment — basically formalizing that large data center customers pay their own way and don't stick existing ratepayers with the bill. That's a direct response to the affordability concerns we're hearing across the sector.

JORDAN: Speaking of affordability — that came up a lot in the Q&A, especially around Indiana. There's been real political pressure there given rising costs generally, and analysts pushed CEO Harry Sideris on whether Duke might use a GENCO-type structure to help finance large-load generation separately. His answer was essentially: we've looked at it before, didn't need it then, but we're open to revisiting it as these big contracts get signed.

ALEX: The nuclear conversation was interesting too. Duke's doing about 300 megawatts of upra

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**Beta Finch Podcast Script: Duke Energy Q1 2026 Earnings**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we turn complex financial reports into clear insights. I'm Alex, and with me as always is Jordan. Today we're diving into Duke Energy's first quarter 2026 results, and folks, this utility giant is making some serious moves in the data center boom.

Before we get started, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex. And wow, what a quarter for Duke Energy! They posted adjusted earnings per share of $1.93, beating last year's $1.76. But honestly, the earnings beat is just the appetizer here - the main course is this massive data center story that's unfolding.

**ALEX:** Absolutely right, Jordan. Duke is sitting at the epicenter of this AI infrastructure buildout. They've now secured 7.6 gigawatts of electric service agreements with data centers - that's adding another 2.7 gigawatts just this quarter alone. To put that in perspective, we're talking about enough power for millions of homes.

**JORDAN:** And what I love about Duke's approach here is how they're protecting existing customers. CEO Harry Sideris really emphasized this - these new data center contracts include minimum demand provisions, credit support, refundable capital advances, and termination charges. Basically, if these big tech companies want Duke's power, they're paying their fair share upfront.

**ALEX:** That's crucial because one of the biggest concerns investors have had about this data center boom is whether utilities will stick existing customers with the bill for all this new infrastructure. Duke seems to have that covered. In fact, they're saying these incremental volumes will actually benefit all customers over time as system costs get spread over a larger base.

**JORDAN:** Speaking of customer benefits, Alex, did you catch those two major announcements that total over $5 billion in customer savings? First, they struck a multi-year deal to monetize up to $3.1 billion in clean energy tax credits through 2028, with proceeds flowing back to customers. And second, they got regulatory approval to combine their two Carolina utilities, which should save customers $2.3 billion through 2040.

**ALEX:** Those are massive numbers, Jordan. And the timing is perfect because Duke has rate cases pending in the Carolinas right now. CFO Brian Savoy mentioned they might use some of these savings as tools to mitigate rate increases. Smart move - it shows regulators they're serious about keeping rates affordable even as they invest heavily in new infrastructure.

**JORDAN:** Let's talk about that infrastructure investment because it's staggering. Duke is executing a $103 billion capital plan - that's with a "B" - and they're funding it through these strategic asset sales. They closed $2.8 billion from selling a minority stake in their Florida utility to Brookfield, plus another $2.5 billion from selling their Tennessee gas business to Spire.

**ALEX:** Over $5 billion in proceeds that strengthen their balance sheet while funding growth. And they're not just building for data centers - they're adding 14 gigawatts of generation over the next five years. A big chunk of that is natural gas plants, including a 1.4 gigawatt facility in South Carolina that just got approved.

**JORDAN:** The nuclear angle is interesting too, Alex. Duke operates the largest regulated nuclear fleet in the nation, and they just got approval to extend the life of their Robinson Nuclear Plant. That's their second plant to reach this milestone, and they plan to seek similar extensions for all their rem

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# Beta Finch Podcast Script: Duke Energy Q4 2025 Earnings

**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown where we dive deep into quarterly results so you don't have to. I'm Alex, and I'm here with my co-host Jordan. Today we're breaking down Duke Energy's fourth quarter 2025 earnings call, and folks, this utility is making some serious power moves.

Now, before we get started, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN**: Thanks Alex. And wow, Duke Energy really delivered some impressive numbers. Let's start with the headline figures - they posted earnings per share of $6.31 for 2025, which represents 7% growth year-over-year and came in above the midpoint of their guidance range. But here's what really caught my attention - they're projecting 2026 EPS guidance of $6.55 to $6.80 and extending their long-term growth target of 5% to 7% through 2030.

**ALEX**: That's solid execution, Jordan. But what really stood out to me was the sheer scale of their capital investment plans. CEO Harry Sideris announced they're raising their five-year capital plan to $103 billion - that's a $6 billion increase from their previous plan. He called it "the largest fully regulated capital plan in the industry." That's not just growth, that's transformation.

**JORDAN**: Absolutely, and when you dig into what's driving that massive capital spend, it's fascinating. They're adding approximately 14 gigawatts of incremental capacity over the next five years. That includes breaking ground on five gigawatts of new natural gas generation across the Carolinas and Indiana. But here's the kicker - they've already locked in contracts for the supply chain and workforce needed to support this build.

**ALEX**: Smart planning there. And speaking of smart planning, let's talk about the data center story because this is where Duke is really differentiating itself. Since their third quarter call, they've signed electric service agreements for another 1.5 gigawatts of new data centers, bringing their total to 4.5 gigawatts under contract.

**JORDAN**: The data center angle is crucial, Alex. CFO Brian Savoy mentioned they have another 9 gigawatts in their active pipeline. But what I really appreciated was how they're protecting existing customers. These contracts include minimum billing requirements, termination charges, and refundable capital advances. Basically, the data centers pay their fair share and then some.

**ALEX**: That customer protection angle came up repeatedly in the Q&A. One analyst asked about affordability concerns, and Sideris was pretty direct about it. He acknowledged that families and businesses feel every rate increase, especially with housing costs, insurance, and food prices all going up. But he emphasized that Duke's rate increases have averaged below inflation over the past decade, and they're using tax credits - over $500 million annually from their nuclear operations - to help offset customer costs.

**JORDAN**: Which brings us to an interesting regulatory story. They just completed settlements in South Carolina that were fully approved in December, and they're progressing with multiyear rate plans in North Carolina that would take effect in 2027. The North Carolina case is particularly important because it includes their proposal to combine the Carolinas utilities, which could save customers over $1 billion through 2038.

**ALEX**: Now Jordan, one thing that jumped out during the Q&A was when an analyst asked about the gap between their 9.6% earnings base growth and their 5% to 7% EPS growth target. Savoy explained that the difference comes from normal utility math -

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WELCOME TO BETA FINCH, YOUR AI-POWERED EARNINGS BREAKDOWN

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex, joined as always by Jordan, and today we're digging into Disney's fiscal third quarter, reported August 5th. Before we get into it, quick disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: And there's a lot to get into here, Alex, because this was genuinely a strong quarter for the House of Mouse.

ALEX: It really was. Let's start with the headline numbers. Total segment operating income was up 21% year-over-year, company-wide revenue grew 7%, and the star of the show was the Experiences segment — that's parks, cruises, and consumer products — which hit a record $10 billion in quarterly revenue, up 10% from last year.

JORDAN: And it wasn't just revenue growing because people are paying more to walk through the gates. Global guest counts were up 4%, domestic park attendance was up 3%, and per-capita spending was up another 4% on top of that. So you've got volume and pricing both moving in the right direction at the same time.

ALEX: Which CEO Josh D'Amaro made a point of highlighting — he said flat out they're not "discounting their way to volume growth," even though they rolled out things like after-2pm pricing at Walt Disney World and Anaheim resident discounts. Those are targeted promotions to specific customer segments, not a sign of underlying weakness.

JORDAN: Right, and CFO Hugh Johnston backed that up when analysts pushed on it — international attendance in Shanghai and Hong Kong has been soft due to a weaker Asian consumer, but domestic tourism and local resident growth more than offset it. They actually raised full-year guidance for Experiences operating income to the high end of their previous high-single-digit growth range.

ALEX: Now let's talk content, because this quarter had a bit of a mixed bag theatrically. Toy Story 5 crossed a billion dollars at the global box office — huge win. But The Mandalorian and Grogu and the live-action Moana both underperformed expectations.

JORDAN: And here's the interesting part — management basically said, "so what?" Hugh Johnston called the film business "a portfolio game" and pointed out that even when a movie doesn't crush it theatrically, the IP still pays off elsewhere. The Mandalorian and Grogu drove retail sales and traffic to the Millennium Falcon attraction at the parks. That's the whole "Disney flywheel" thesis — one story, monetized across theaters, streaming, parks, and merchandise.

ALEX: Which, by the way, Toy Story is the poster child for — five films, over $4 billion in box office, 2 billion-plus hours streamed, four theme park lands, nineteen attractions, two hotels. That's a level of cross-platform integration that's genuinely hard for competitors to replicate.

JORDAN: And they got a nice tailwind they didn't even make — Sony's Spider-Man had a record-breaking opening weekend this past weekend, and Josh was quick to point out Disney still owns a piece of that character's value through consumer products, parks, and streaming even though Sony released the film. Nice reminder that IP value doesn't always require Disney to foot the production bill.

ALEX: Let's shift to streaming, because that's where a lot of the long-term story is being written. SVOD operating margin came in at 13% this quarter, and they're still targeting double-digit margins for the full fiscal year. Big milestone too — Hulu subscribers can now link profiles and manage everything through the Disney+ app, which is a step toward that "One Disney" unified experience.

JORDAN: And the announcement that got people talking this morning was the TikTok distribution deal. The idea is to bring

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown where we cut through the noise to bring you what matters most from corporate earnings calls. I'm Alex, and joining me as always is my co-host Jordan.

JORDAN: Hey everyone! Today we're diving into Disney's Q2 2026 earnings call, and wow - this was Josh D'Amaro's first call as CEO, so there was a lot to unpack.

ALEX: Absolutely. And before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Right, so let's get into the numbers first. Disney posted solid results - revenue grew 7%, total segment operating income up 4%. They actually outperformed their own guidance for the quarter, which is always nice to see.

ALEX: Yeah, and what really caught my attention was the streaming business. Disney+ revenue growth actually accelerated from 11% in Q1 to 13% in Q2. That's the opposite of what we're seeing from some other streaming players who are hitting growth walls.

JORDAN: Exactly! And it wasn't just subscriber volume driving that growth - it was both rate increases AND more subscribers. Plus they had double-digit advertising revenue growth. The integrated Disney+ and Hulu experience seems to be helping with retention too.

ALEX: Now, the parks business - Disney Experiences - that was interesting. Revenue up 7%, operating income up 5%, but there were some headwinds. Jordan, can you break down what's happening there?

JORDAN: Sure. So they're dealing with two main challenges: reduced international visitation to US parks, and the impact of Universal's Epic Universe opening, which is pulling some attendance away. Domestic park attendance was actually down 1% in the quarter. But here's the key - Hugh Johnston, the CFO, said they expect these headwinds to ease in the back half of the year as they lap these impacts.

ALEX: And they're still investing heavily in growth. They just opened World of Frozen at Disneyland Paris and launched the Disney Adventure cruise ship in Asia. D'Amaro mentioned they have more projects underway globally than at any time in Disney's history.

JORDAN: That ambitious expansion is really part of D'Amaro's bigger vision. He kept talking about Disney+ becoming the "digital centerpiece" of the company - not just a streaming service, but a hub that connects everything Disney does.

ALEX: Right, and this is where it gets really interesting from a strategic standpoint. D'Amaro is talking about creating a more connected Disney experience across streaming, sports, games, and physical experiences. Think about it - someone watches a Disney movie, then visits a theme park, buys merchandise, plays games - each touchpoint reinforces the others.

JORDAN: It's all about lifetime value. He specifically mentioned that their biggest opportunity might be reducing churn on Disney+. If they can keep subscribers engaged longer, that flows through to everything else.

ALEX: The technology piece was fascinating too. They're going heavy on AI across multiple areas - hyper-personalized recommendations, better ad targeting, even precision labor forecasting at the theme parks to optimize staffing.

JORDAN: And they're experimenting with short-form content and vertical video to meet younger audiences where they are. D'Amaro specifically called out Gen Alpha as important for Disney's future.

ALEX: Now, one thing that came up multiple times in the Q&A was about Disney's portfolio - specifically whether they'd consider selling off some assets. Hugh Johnston was pretty clear that they view their entertainment networks as "brands with studios" rather than just distribution platforms, and separating them would be complex without creating much value.

JORDAN: Yeah, and on ESPN, they're

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**BETA FINCH PODCAST SCRIPT**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we turn quarterly reports into conversations that actually make sense. I'm Alex.

**JORDAN:** And I'm Jordan. Today we're diving into Disney's Q1 2026 earnings - and wow, what a quarter this was.

**ALEX:** Before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Absolutely. Now, Alex, Disney just reported some pretty impressive numbers. The experiences segment hit over $10 billion in quarterly revenue for the first time ever. That's massive.

**ALEX:** It really is, Jordan. But let's start with the big picture here. Disney seems to be firing on all cylinders - their film studio generated over $6.5 billion in global box office revenue in calendar 2025, making it their third biggest year ever. We're talking about three billion-dollar movies: Avatar: Fire and Ash, Zootopia 2, and Lilo and Stitch.

**JORDAN:** And Zootopia 2 became Hollywood's highest-grossing animated film of all time at $1.7 billion. But here's what I find fascinating - CEO Bob Iger specifically mentioned how these theatrical successes are creating this flywheel effect. When Zootopia 2 and Avatar hit Disney Plus, they're seeing millions of first streams and hundreds of millions of new viewing hours.

**ALEX:** That interconnected strategy is really paying off. Speaking of streaming, they saw a 13% increase in subscription revenue, and the segment is now profitable with margins hitting around that 10% target they set.

**JORDAN:** Right, and CFO Hugh Johnston mentioned they're actually exceeding that target - they hit 12% revenue growth with about 50% earnings growth in streaming. That's serious operating leverage. But what caught my attention was this OpenAI partnership with Sora.

**ALEX:** Oh, the AI content play. So Disney struck a three-year licensing deal where users can prompt Sora to create 30-second videos featuring about 250 Disney characters. Iger was careful to note these don't include human voices or faces - probably for obvious legal and creative reasons.

**JORDAN:** And they're planning to curate this Sora-generated content on Disney Plus as a way to add short-form video features. Iger mentioned they've noticed the huge growth in short-form content on platforms like YouTube, so this is their way of jumping into that space while maintaining that Disney brand control.

**ALEX:** What I found interesting was when an analyst asked about the impact on traditional programming needs, and Iger basically said this won't cannibalize anything. He sees AI as serving three purposes: enhancing creativity, improving productivity, and creating better connectivity with consumers.

**JORDAN:** Smart positioning. Now, let's talk ESPN because that NFL Network acquisition they just closed is a big deal. ESPN delivered its second-highest Monday Night Football viewership in twenty years, and they're gearing up for their first Super Bowl broadcast.

**ALEX:** And Jordan, the timing couldn't be better with ESPN launching their direct-to-consumer streaming service. The subscriber decline in traditional ESPN slowed to just 4% - a major improvement from the 7-8% drops they were seeing before.

**JORDAN:** The bundling strategy is clearly working. Subscribers who get the Disney Plus, Hulu, and ESPN bundle are churning less, which is huge for lifetime value. Iger mentioned they're working toward a fully integrated app experience by the end of the calendar year.

**ALEX:** Let's shift to experiences because $10 billion in quarterly revenue is just staggering. They've got expansion projects at every single theme park, the new Frozen land opening at Disneyland Paris

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, where we take the numbers and the noise from corporate earnings calls and turn them into something you can actually digest. I'm Alex.

JORDAN: And I'm Jordan. Today we're digging into Deere & Company's third quarter fiscal 2026 results — big green tractors, big infrastructure equipment, and a business that's basically riding two different economic cycles at once.

ALEX: Before we get into it — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Good, let's get into the numbers. Alex, what jumped out at you?

ALEX: The headline is Deere beat expectations pretty handily. Net sales and revenue up 5% to $12.6 billion, equipment operations sales up 6% to $11 billion, net income of $1.38 billion, or $5.10 a share. And that 14.4% operating margin for equipment operations is genuinely strong given how choppy the ag market is right now.

JORDAN: Right, and that's really the story of this quarter — a tale of two businesses. Production & Precision Ag, their big-tractor and combine segment, was actually down 6% year-over-year to $4 billion, with margins around 13.2%. That's the segment feeling the ag downturn most directly.

ALEX: But then you flip to Small Ag & Turf — up 12% to $3.4 billion with an 18.4% margin — and Construction & Forestry, up 18% to $3.6 billion with a 12.1% margin. Those two segments are basically carrying the company through the ag trough.

JORDAN: That diversification point came up again and again on the call. Management kept saying it — while big ag equipment is struggling, construction and the smaller ag/turf business are picking up the slack. It's a nice illustration of why a diversified portfolio actually matters in a cyclical industry.

ALEX: Let's talk guidance, because they actually raised the full-year outlook despite trimming some segment numbers. Full-year net income guidance moved up to $4.75 to $5 billion, and operating cash flow guidance improved to $5 to $5.5 billion.

JORDAN: But within that, Production & Precision Ag guidance came down — now expecting sales down about 10% for the year, with margin guidance narrowed to 11-12%. That's mostly South America and Europe softness. South America specifically is now guided down 15-20% for the year, driven by high interest rates and elevated fertilizer costs squeezing farmer economics.

ALEX: Meanwhile Small Ag & Turf guidance actually went up — margin guide raised to 14.5-15.5% — and Construction & Forestry held its roughly 20% sales growth guide with margins tightened to 10.5-11.5%. Construction is genuinely firing on all cylinders right now: data centers, infrastructure, road building.

JORDAN: One thing worth flagging for listeners — tariffs were a huge theme on this call. Deere now expects about $1.1 billion in direct tariff expense for the year, offset partially by $382 million in IEPA refunds recognized so far. CFO Brent Norwood said net tariff exposure this year is around $750 million, but he flagged that it'll actually step up to roughly $1 billion next year as the refund benefit doesn't repeat.

ALEX: That's an important nuance — investors hear "tariff relief" and assume it's all good news, but the mechanics here mean next year could actually be a modest headwind, not a tailwind.

JORDAN: The other big storyline was the model year 2027 early order programs — these are essentially pre-orders dealers and farmers lock in ahead of the season. Deanna Kovar, who runs the ag and turf business, said combined planter and sprayer orders are running up mid-single digits versus last year.

ALEX: And that's a meaningful signal because management explicitly said they view 20

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**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and I'm here with my co-host Jordan to dive into Deere & Company's Q2 2026 earnings call. Jordan, before we dig in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN**: Thanks Alex. And what a quarter it was for Deere! The agricultural giant posted some really interesting results that tell a tale of resilience despite challenging market conditions. Let me start with the headline numbers - net sales came in at $13.37 billion, up 5% year-over-year, with equipment operations margins hitting 16.9%.

**ALEX**: Those are solid numbers, but there's a big asterisk here, right? The margins got a significant boost from something pretty unusual.

**JORDAN**: Exactly! Deere recorded a massive $272 million recovery from IEEPA tariff refunds - basically getting money back from tariffs they'd previously paid. Without that one-time benefit, the underlying story becomes more nuanced. This refund alone lifted margins by about 2.5 percentage points.

**ALEX**: So let's break down what's happening across their three main business segments, because this is where the story gets really interesting. Jordan, it sounds like we're seeing very different cycles playing out simultaneously.

**JORDAN**: That's the key insight, Alex. Production and Precision Ag - their large agriculture business - saw sales drop 14% to $4.5 billion. This reflects the ongoing challenges in large ag markets with elevated input costs, high interest rates, and cautious farmer sentiment despite recent grain price increases.

**ALEX**: But on the flip side, their smaller segments are firing on all cylinders?

**JORDAN**: Absolutely. Small Ag and Turf was the star performer with sales up 16% to $3.48 billion and operating margins over 20%. Management highlighted strength in turf markets recovering after several down years, plus healthy dairy and livestock sectors. Construction & Forestry also impressed with sales jumping 29% to $3.79 billion, driven by robust infrastructure spending and data center construction.

**ALEX**: I found it fascinating how CEO Brent Norwood described this as having all three segments "operating at different points in the cycle." Can you explain what that means for investors?

**JORDAN**: It's actually a strength, Alex. While large ag is operating "below trough levels," small ag and turf is progressing toward "mid-cycle," and construction is "slightly above mid-cycle." This diversification provides resilience - when one segment struggles, others can compensate. It's like having a balanced portfolio within a single company.

**ALEX**: Now, let's talk about the elephant in the room - tariffs. This has been a major headwind for Deere, but the dynamics are shifting, right?

**JORDAN**: The tariff situation is incredibly complex. While they got that $272 million refund I mentioned, their overall tariff exposure remains about $1.2 billion annually - roughly a 3% margin headwind. What's interesting is management's approach. CFO Josh Beal emphasized they're not passing tariff costs to customers through surcharges, instead focusing on cost mitigation strategies like reshoring and sourcing adjustments.

**ALEX**: That seems like a customer-friendly approach, but how sustainable is it?

**JORDAN**: Management seems confident in their mitigation efforts. About 80% of Deere's U.S. sales are produced domestically with 75% of components sourced from U.S. suppliers. They're doubling down on this with $20 billion committed to U.S. manufacturing investment over the next decade. They just started building excavators in North Carolina following a

This episode includes AI-generated content.