Moline, Ill.-based Deere & Co. announced today that earnings its second fiscal quarter fell 38 percent and that it expects profits this year to be less than originally forecast, Bloomberg reported.

“The outlook for market conditions over the remainder of the year remains highly uncertain and the impact on the company’s sales and earnings is difficult to assess,” the company said in a statement.

Deere said its net income in the three months ended April 30 declined to $472.3 million or $1.11 a share, compared with $763.5 million, or $1.74 per share during the same period a year ago. Analysts had expected a profit of $1.07 per share.

Robert Lane, Deere’s CEO, said the company is relying on elevated U.S. farm incomes to boost high-horsepower tractor sales. According to a report released by the U.S. Department of Agriculture, net farm income is expected to be $71.2 billion this year, topping the 10-year average of $65 billion.

However, despite jumps in farm income, Lane said the housing slump has slashed demand for construction equipment.

“Deere’s farm segment is doing pretty well, but construction is not and consumer is kind of a challenge,” said Larry De Maria, a New York-based analyst with Sterne Agee & Leach Inc., in a telephone interview before the results were released.

The company expects equipment sales to fall 26 percent in the third quarter and 19 percent for the full year.