John Deere Sends Warning Shots to the Global Farming Business

The company said Friday that it expected equipment sales to fall 10%, down from a previous forecast of a 7% drop.

It expects net income to total $1.3 billion, down from $1.4 billion in an earlier forecast.

Deere's profits in its fiscal first quarter tumbled 80% from the prior year to $1.12 a share, still beating analysts' forecast for $0.71, according to Bloomberg.

Incomes in the farming industry have been drying up amid an oversupply of crops that has weakened prices.

In the earnings release, CEO Samuel Allen said: "John Deere's first-quarter results reflected the continuing impact of the downturn in the global farm economy as well as weakness in construction equipment market. At the same time, all of Deere's businesses remained solidly profitable, benefiting from the sound execution of our business plans and the success of actions to develop a more responsive cost structure."

Shares fell nearly 3% in premarket trading, and they are down about 11% over the past 12 months.

"Although Deere expects another challenging year in 2016, our forecast represents a level of performance much better than we have experienced in previous downturns," Allen said.

Here are some highlights from the company's presentation