Moline, Ill.-based Deere & Co., the world’s largest maker of farm equipment, reported lower-than-expected profits in the latest quarter and said raw material costs would hurt profits in the fourth quarter, Bloomberg.com reported.

Net profits rose 7 percent to $575.2 million, or $1.32 a share, in its fiscal third quarter. However, analysts had expected Deere to earn $1.36 per share on sales of $7.17 billion. A year ago, Deere earned $537.2 million, or $1.18 a share.

The company said today that sales in the three months ended July 31 rose 17 percent to $7.74 billion, but that material costs and freight expenses were $140 million more than a year ago. And with a weak housing market comes less construction, meaning less production for Deere.

The company said sales of backhoes and bulldozers will fall as much as 5 percent, more than it previously forecast.

“Construction sales were weaker than I expected,” said Eli Lustgarten, an analyst with Longbow Securities in Independence, Ohio. “It’s a moving target, and construction’s not getting any prettier.”

This is the second consecutive quarter that Deere has fallen short of estimates; before that, Deere had exceeded estimates every quarter since August 2005. Deere said it expects fourth-quarter profits to be $425 million; analysts had projected $490 million.