Caterpillar's 4th-quarter profit plunges
Caterpillar Inc., the world’s largest construction and mining equipment producer, today issued a cautious forecast for 2010 as it reported its quarterly and yearly earnings.
Sales at the Peoria, Ill., company fell 37% in 2009 to $32.4 billion from $51.3 billion in 2008. Profit over the year fell 75% to $895 million from $3.56 billion in 2008.
The company said the past year was the worst it had experienced since the Great Depression. In the fourth quarter, sales slid to $7.9 billion, down 39% from $12.9 billion in the same period of 2008. Profit was down 65% to $232 million from $661 million a year earlier.
The company's shares fell 7%, or $3.93, to $51.92 in New York Stock Exchange trading.
Last year, dealers cut their inventories of new yellow-and-black machines by more than $3.3 billion and new engines by more than $600 million.
And as nonresidential building construction slowed, contractors were wary of buying equipment.
But sales of aftermarket service parts and interest in mining equipment rose, usually an indicator of growing demand for machines and engines and a sign of consumer confidence, Caterpillar said.
The company brought back 500 workers it had laid off to deal with production demand, after cutting more than 25,000 jobs during a restructuring.
And the global economy seems to be improving, and could grow more than 3% this year, the company said. Caterpillar expects the Chinese market to boom more than 10% and the Indian economy to expand 8%. But the U.S. and Europe will grow just 3.5% and 1%, respectively, it said.
The company said it expects its sales for 2010 to be up 10% to 25%, with profit around $2.50 a share. Analysts, on average, have been forecasting $2.70 a share, according to Bloomberg News data.
"We expect 2010 will be a better year than 2009, and Caterpillar is in an excellent position to benefit from growth in the world economy," Chief Executive Jim Owens said.
-- Tiffany Hsu