Farm equipment retailer Titan Machinery Inc cut its full-year profit forecast after it reported a lower-than-expected quarterly profit as the worst drought in 56 years in the U.S. Midwest hit prices of tractors and combines.

Shares of the West Fargo, North Dakota-based company were down 15 percent in premarket trading on Monday. They closed at $25.36 on the Nasdaq on Friday.

Investors fear sales of tractors and combines could see a slowdown in 2013 as farmers conserve cash after the fall harvest.

Titan sells agricultural and construction equipment manufactured under the CNH Global (CNH.N) family of brands, as well as equipment from a variety of other manufacturers. It is the largest retail dealer of CNH's Case IH Agriculture equipment in the world.

Gross margin for the second quarter fell to 17.2 percent, from 18 percent a year earlier, as the company offered discounts to counter competition.

Titan Machinery cut its full-year profit forecast to between $2.10 and $2.30 per share from its previous forecast of between $2.55 and $2.75 per share.

It maintained its full-year revenue forecast of between $1.95 billion and $2.1 billion.

Second-quarter net income fell to $5.2 million, or 25 cents per share, from $6.3 million, or 30 cents per share, a year earlier.

Revenue rose 32 percent to $410.1 million.

Analysts on average expected the company to earn 43 cents per share on revenue of $401.9 million, according to Thomson Reuters I/B/E/S.