DOW JONES NEWSWIRES
Caterpillar Inc. (CAT) swung to a first-quarter loss on $558
million in restructuring charges while results at its machinery
segment slumped on tumbling demand.
The heavy-machinery maker slashed its forecasts for the year,
cutting its earnings forecast in half to $1.25 a share, below
analysts' reduced average estimate of $1.77, according to Thomson
Reuters. Caterpillar is now looking for revenue of $31.5 billion to
$38.5 billion, compared with the prior view of $36 billion to $46
billion.
Its shares, which are down two-thirds since May, fell another
4.9% premarket to $29 even as the quarter's results handily topped
expectations.
Caterpillar expects the global economy to contract 1.3% and
remain in recession for most of the year, amid continued tight
credit. Though the rate of decline appears to be moderating, the
company expects further drops, despite government stimulus plans
that are expected to boost construction spending later this
year.
The company reported a net loss of $112 million, or 19 cents a
share, compared with year-earlier net income of $922 million, or
$1.45 a share, a year earlier. Excluding restructuring charges, the
latest quarter would have had a 39-cent profit.
Net sales decreased 22% to $9.23 billion.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 4 cents on revenue of $8.54 billion.
Machinery sales fell 29% and engine sales dropped 8%.
The infrastructure and commodities boom powered Caterpillar for
roughly five years - helping it more than double its annual revenue
from 2002 to 2007 - but collapsed late last year. Overseas sales
offset a slumping U.S. housing construction market early in 2008,
but late in the year a pullback in commodities prices and global
demand hit results at Caterpillar and rivals such as Komatsu
Ltd.(KMTUY) of Japan and Deere & Co. (DE)
Caterpillar is shedding nearly 25,000 jobs, in addition to other
cost cutting moves, such as pay cuts, plant closings and shortened
workweeks, though it has managed to maintain its dividend.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com