Caterpillar Inc,the world’s largest maker of tractors and excavators,slashed its 2012 forecast for the second time this year and warned the global economy was slowing faster than it had expected.
The caution sign was the latest in a string of comments from multinational manufacturers,including General Electric Co and Honeywell International Inc,that the economic recovery remains tenuous and tepid at best.
Caterpillar’s retail dealers are selling off inventories,rather than buying new machines,forcing the company to idle some production at plants in Illinois,executives said on Monday.
As we’ve moved through the year,we’ve seen continued economic weakening and uncertainty,Chief Executive Doug Oberhelman said in a statement.
Caterpillar does not expect improvement in overall economic growth until the second half of 2013,he added.
The statement came despite better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment from a 30-year low. Europe and parts of Latin America remain tough regions for Caterpillar.
The weakening euro zone is the most significant risk to the company’s 2013 outlook,executives said. China,though,appears to to be on the edge of something of a recovery,Oberhelman said in an interview with CNBC.
The company expects sales of mining equipment to slip in 2013 as falling metal and coal prices force companies to pull back on production. Sales of construction equipment should improve next year,especially in emerging markets.
And sales of power generators should be flat next year,Caterpillar executives said. The three areas each comprise roughly one-third of its sales.
Shares fell 1.5 percent to $82.60 in early trading.
For the third quarter,Caterpillar posted profit of $1.7 billion,or $2.54 per share,compared with $1.14 billion,or $1.71 per share,in the year-ago period.
Excluding one-time items,the company earned $2.26 per share. By that measure,analysts expected $2.22,according to Thomson Reuters I/B/E/S.
Revenue rose 5 percent to $16.45 billion. Analysts looked for $16.77 billion.
For 2012,the company now expects to earn $9 to $9.25 per share on sales of $66 billion. The company had previously looked for about $9.60 per share.
Analysts estimated 2012 profit of $9.40 per share on revenue of $67.64 billion.
It was the second time the 2012 forecast had been cut this year.
Caterpillar spooked markets at a major industry conference last month,when it looked three years into the future and slashed its earnings forecast for 2015. Oberhelman blamed an anemic economic outlook,especially in the mining sector.
The results come the week after Peoria,Illinois-based Caterpillar announced a wave of senior executive retirements,including two members of its leadership team.
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