(Reuters) -Farm and construction equipment maker CNH Industrial reported second-quarter profit and revenue above Wall Street estimates on Friday, as its ongoing effort to reduce costs helped offset pressures from lower sales and production.

The Basildon, UK-based company has been producing tractors and combines below retail demand to reduce excess dealer inventories, as it manages through a cyclical period of lower sales – a strategy also adopted by peers Deere, AGCO and Caterpillar.

CNH expects 2025 sales to drop below last year's levels and warns that, combined with reduced production, this will likely put further pressure on its margins. However, its efforts to reduce costs will partially mitigate the erosion.

Demand for new equipment has taken a hit from a prolonged weakness in farmer income and weak commodity prices, prompting manufacturers to scale back production as farmers postpone or reassess major purchase decisions.

Shares of the company, famous for its Case IH and New Holland brands, rose 1.6% in pre-market trading. They have risen more than 14% since the start of the year.

CNH reported an adjusted profit of 17 cents per share for the quarter ended June 30, above analysts' expectations of 14 cents per share, according to data complied by LSEG.

Its total costs and expenses in the reported quarter dropped to $4.43 billion, from $5.03 billion last year.

Quarterly revenue fell 14% to $4.71 billion, but was above analysts' estimates of $4.17 billion.

The company reaffirmed its full-year outlook, but cautioned that ongoing uncertainty surrounding U.S. trade policy, potential responses from global trading partners, and their broader impacts could influence its projections.

(Reporting by Abhinav Parmar in Bengaluru; Editing by Shailesh Kuber)