John Deere sends warning shots to the global farming business

Farming and construction equipment behemoth John Deere has sent warning shots to its industry once again as it cut its outlook for this year.

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

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% to $1.12 per 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 pre-market trading, and 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.