Shares in Deere & Co looked tumbled 7% on opening, wiping more than $2bn from its stockmarket value, after the world's largest agricultural equipment maker cut its forecast for full-year earnings, as farmers beset by poor weather curtail spending plans.

The maker of John Deere equipment lowered by two points, to 13%, its forecast for sales growth in the year to the end of October, and cut its estimate for earnings for the period by $250m to $3.1bn.

The downgrades reflected the dent to farm profitability from adverse weather, notably in the US where the worst drought since 1956 has slashed crop expectations, while hiking livestock farmers' feed bills.

Deere cut $8.0bn from its forecast for US net farm cash income in 2012.

 'Warrant some caution'

However, Deere, trimming forecasts for North American, European Union and, in particular, Asian farm equipment markets, also flagged a softened foreign performance.

"Global economic conditions and dryness in several key markets warrant some caution in coming months," Samuel Allen, the Deere chief executive, said.

Mr Allen highlighted a "weakening in certain international markets" in earnings of $788m for the May-to-July quarter, representing growth of 10.6% year on year but, at $1.98 per share, coming below market expectations.

Wall Street had forecast a $2.31-a-share result.

Sales, up 15% to $9.59bn, also fell short of market and company hopes.

"Although a strong quarter, we are not satisfied that sales fell short of our expectations," Mr Allen said.

Shares drop 

The shortfalls by a group normally known for exceeding guidance, and for skilful management of investor expectations, sent Deere shares 5.7% lower to $75.55 in before-the-bells deals.

The group had, in quarterly results statements in February and May, raised earnings expectations.

Deere also acknowledged that some operational hiccups had contributed to the earnings miss in the latest quarter, as it struggled to bring a rash of fresh models to market, noting "short-term manufacturing inefficiencies resulting from the introduction of a record number of new products".

Deere shares fell to $74.45 in opening deals before recovering some ground to stand at $75.10 in closing deals, down 6.3% on the day.