Shares in Deere & Co dropped nearly 5% after the ag machinery giant trimmed its earnings outlook, citing falling currencies in overseas markets – even after starting its financial year on a better note than investors had expected.
The maker of John Deere tractors said it was expecting "another challenging year in 2016", with global farm incomes remaining tight.
It forecast equipment sales falling by 10% in the year to the end of October, quicker than the 7% drop it had previously expected.
And it lowered by $100m to $1.3bn its forecast for group earnings for the year.
"Included in the forecast is a negative foreign-currency translation effect of about 3%," said Deere which, like other farm supply groups, is seeing its earnings affected by currency weakness in some major agricultural economies such as Brazil, besides by crop price weakness.
Weak currencies reduce the affordability of imported goods, and lower the value, in dollar terms, to US companies of foreign earnings.
Deere maintained a gloomy outlook for US ag machinery sales over the year, seeing them fall by 15-20%.
"The decline, reflecting the impact of low commodity prices and stagnant farm incomes, is expected to be most pronounced in the sale of higher-horsepower models," the group said.
Deere foresaw US farm incomes down slightly overall over the year from October 31, thanks to lower livestock receipts.
Arable receipts were seen flat with the previous 12-month period, at the lowest level since 2010.
And declining sales were also seen in South America, down 10-15%, mainly due to "economic concerns and uncertainty about government-sponsored financing in Brazil".
The dollar-terms crop value of Brazilian agriculture production was seen falling 2% in 2016.
Sales in the EU were forecast at best flat and potentially dropping by 5%, "with the decline attributable to low commodity prices and farm incomes, including further pressure on the dairy sector".
John Deere saw "economic activity gradually improving," in the EU, but "arable income remains under pressure", while there will be "continued weakness in dairy sector".
And in Asia, flat or slightly lower sales are expected "due in part to weakness in China".
In China there is a move toward mechanisation, but "changes in subsidies are causing uncertainty".
And in India two bad monsoons in a row is impacting farm incomes.
The initial market reaction was to send Deere shares down 4.8% to $76.50 in New York.
However, with Wall Street already having factored in earnings of $1.3bn for the full year, as measured by the consensus market estimate, the shares recovered some ground to stand at $78.00, a drop of 2.9% on the day.
Furthermore, Deere's earnings for the November-to-January period, the first quarter of its financial year beat expectations, if falling by 34% to $254.4m.
The earnings were equivalent to $0.80 a share, ahead of analysts' expectations of a $0.70-a-share result.
Total revenues were down 13%, to $5.5bn, ahead of a market expectations of $4.79bn.
"Deere's first-quarter results reflected the continuing impact of the downturn in the global farm economy as well as weakness in construction equipment markets," said Samuel Allen, the Deere chief executive.
By William Clarke