PITTSBURGH (AP) — Deere & Co.’s second-quarter profit dropped 38 percent as farmers and other customers cut spending on tractors, mowers and construction equipment.

Still, the results edged out Wall Street expectations, boosting shares of the world’s largest farm equipment maker, even as it slashed its profit forecast for a second time this year.

Equipment sales fell 17 percent, sapped by a global slowdown and lower crop prices that undercut demand for Deere’s green-and-yellow machines. The sharpest sales declines occurred outside the United States and Canada, where Deere has expanded quickly in recent years. Deere said market conditions remain uncertain.

Farmers have become cautious about spending on new equipment as crop prices, which drive sales, have tumbled from historic highs last year. The costs of fertilizer and fuel, meanwhile, remain relatively high. And the global credit crunch has made it more difficult to get loans.

The problems in Deere’s agriculture markets have only compounded a longer-term collapse in construction and a U.S. recession that has stifled consumer spending on products like lawn care machines.

The Moline, Ill.-based company earned $472.3 million, or $1.11 per share, in its fiscal second quarter ended April 30. Revenue fell 17 percent to $6.75 billion.

Analysts had forecast profit of $1.07 per share on revenue of $6.60 billion.

A year earlier, the company earned $763.5 million, or $1.74 per share.

Deere cut its 2009 forecast for net income to $1.1 billion, down from $1.5 billion expected in February, and almost $2 billion predicted late last year.

Still, Deere shares rose 67 cents, or 1.5 percent, to $44.49 in afternoon trading.

Investors may be heartened by a Deere forecast of higher farm receipts next year, suggesting “perhaps a better year than anticipated,” said Lawrence De Maria, an analyst with Sterne, Agee & Leach.

And inventories in Deere’s construction equipment business, which lost money during the quarter, are about half the industry average, “so they’re running the business pretty well,” he said.

The company, which also makes riding mowers and forestry machines, said overall equipment sales plunged 30 percent outside North America. Equipment sales dipped 8 percent in the United States and Canada, its largest market.

Sales of tractors, combines and other farm equipment — Deere’s biggest source of revenue — fell 4 percent due to currency exchange fluctuations, lower shipments and higher material costs. Those sales are often driven by prices of corn, wheat and other crops, which have fallen from record levels last year.

The U.S. Department of Agriculture predicts U.S. farm income will fall some 20 percent in 2009, but will remain higher than the average amount earned in the previous 10 years.