Reporting a substantial 45 percent fall in its first-quarter profit, Deere & Co has cut its full-year earning estimates, citing the economic downturn, tight credit, unstable foreign exchange rates, and weakened Latin American sales.

The Moline, Illinois-based world's biggest farm equipment maker posted a $203.9 million quarterly profit, as against the year-before figures of $369.1 million. The reported profit was way below the average estimates of fifteen Bloomberg-surveyed analysts.

Nonetheless, the sales for the first quarter, which ended on January 31, despite having fallen 1.2 percent to $5.146 billion from $5.2 billion, still exceeded the analysts' estimates of $4.99 billion.

Cutting its $1.9 billion November forecasts of net income in 2009, the company said in a statement that it now projects the net income figures to be around $1.5 billion. Deere also expects its full-year equipment sales to drop 8 percent from the November estimates.

Deere had announced 700 layoffs last month in the wake of falling demand for its farm and forestry equipment.

The company's CEO Robert Lane said that the plunge in sales resulted from Argentina's drought and the credit squeeze in Brazil, where 502 employees were laid-off after a 20 percent drop in sales. Layoffs at the company's Iowa facility were announced to bring the production of construction and forestry equipment in line with an anticipated 12 percent fall in sales.