The Moline, Ill.-based company earned $981 million for the quarter that ended April 30, compared to $1.08 billion a year ago. Earnings per share of $2.65 beat analysts' estimate of $2.48.
Revenue fell 9% to $9.95 billion.
Sales of its agriculture and turf equipment were down 12% from a year ago. Construction and forestry equipment sales rose 2%.
"Although the agricultural economy remains in a relatively healthy condition, farm income is forecast to be lower than last year," the company said. "The decline is putting pressure on demand for farm equipment, especially for larger models."
Shares slipped 2% Wednesday morning to $91.69.
The decline in equipment sales in the U.S. and Canada -- down 12% -- comes amid Deere's "product transitions" associated with more stringent emissions standards, the company said. Outside the U.S. and Canada, sales declined 6%.
Deere expects equipment sales to remain sluggish throughout the year, projecting a 4% drop for fiscal 2014. Its net income for the year will total about $3.3 billion, it said.