(Reuters) -Deere & Co ( DE ) cut the lower end of its annual profit forecast and reported a fall in second-quarter results on Thursday due to economic uncertainty and softer demand for its tractors from farmers opting to rent machines instead.

Farmers facing high interest rates and weaker crop prices are leaning more towards renting rather than buying machinery, hitting sales of big-ticket equipment such as tractors and combines.

Tariffs imposed by U.S. President Donald Trump have added to production costs and led to uncertainty for large industrial firms in international markets.

The company would continue to make "significant investments" in its core U.S. market, Deere said.

Peer CNH Industrial slashed its annual profit forecast earlier this month, citing a hit from lower shipments due to cooling demand and dealer destocking.

Deere and CNH struggled to keep pace with strong tractor demand in 2022, when farm income hit a record high and pandemic assistance payments gave farmers extra money to upgrade their fleets.

The world's largest agricultural-equipment maker expects its annual net income to now be between $4.75 billion and $5.5 billion, compared to its prior forecast of $5 billion to $5.5 billion.

Overall revenue for the second quarter fell 16% to about $12.8 billion, from $15.24 billion a year earlier.

Its quarterly net income fell to $1.8 billion or $6.64 per share, compared with $2.37 billion or $8.53 per share a year ago.