- NASA pushing hard to get back into space game
- Harvard student to face federal charges for bomb hoax
- Ronnie Biggs of ‘Great Train Robbery’ fame dies, 84
- Pope Francis wins another ‘Person of the Year’ — from gay rights magazine
- Rep. Steve Stockman: Give my campaign $10, and you’ll get an Obama barf bag
- Putin: Russia to buy $15 billion in Ukraine bonds
- Expert: Obamacare ‘death spiral’ fears exaggerated
- Alabama firefighters dig for survivors of apartment blast
- Big Sur wildfire destroys home of firefighting chief
- ‘ ’Twas the Night Before Christmas’ set for mock trial to argue authorship
Caterpillar: Economy weaker than expected
MINNEAPOLIS — Caterpillar says the world’s economy is weaker than it thought, and it doesn’t expect growth to pick up until the second half of next year.
The company Monday cut its 2012 revenue and profit guidance, and took a very cautious view toward its performance in 2013.
Caterpillar makes the yellow-painted excavators, heavy tractors and other construction equipment often seen on road-building projects. It’s the world’s largest maker of construction and mining equipment, and also makes engines. Its results are watched closely for signs of where the broader economy is heading.
Where it’s headed right now is for some weak growth, based on what Caterpillar said Monday.
It predicted worldwide economic growth of 2.7 percent for next year, up from the 2.5 percent growth it expects for 2012. It expects the cheap lending offered in most countries to continue next year, although “growth has been slow to respond,” the company said.
“As a result, we are not expecting improvement in overall economic growth until the second half of 2013,” the company said.
Caterpillar sells to dealers, who turn around and sell to end users such as construction and mining companies. Those dealers are trying to cut inventory, so they’re ordering less equipment than customers are buying.
In response, Caterpillar said it has reduced production, resulting in temporary shutdowns and layoffs. Lower production will continue until dealer demand lines up with end user demand, Caterpillar said.
The layoffs will generally be short-term, such as a factory shutting down for a week, the company’s chief financial officer, Ed Rapp, said in an interview.
“We haven’t seen the broad-based economic growth that we really anticipated in 2012,” he said.
As a result, Caterpillar cut its 2012 outlook for the second time this year. Revenue is expected to grow 9.7 percent to $66 billion, after rising 41 percent in 2011. Profit is now forecast at $9 to $9.25 per share, down from a previous forecast of $9.60 per share.
Analysts surveyed by FactSet had expected revenue of $67.2 billion, with profit of $9.41 per share.
The company said growth was below expectations in the U.S. and China, and with much of Europe in recession.
The U.S., China and most developing economics should see modest improvement next year, Caterpillar said. But it sees “continuing difficulty” and only marginal growth in Europe.
“We’re not expecting rapid growth, and we’re not predicting a global recession,” Chairman and CEO Doug Oberhelman said.
By John R. Bolton
The president fiddles at his domestic altar while the world burns
- U.S. Army mulls wiping out memory of Robert E. Lee, 'Stonewall' Jackson
- PRUDEN: The scam that will not die
- Gov't wasted $30 billion on 'pillownauts,' crystal goblets -- buying human urine!
- Top Democrats reject court ruling over NSA spying on Americans
- BOLTON: Nero in the White House
- White House is obstructing probe on Navy Yard shooter, NSA leaker, Darrell Issa says
- We told you so: Conservatives foresaw polygamy ruling
- Colorado revolt: 55 of 62 sheriffs refuse to enforce new gun laws
- Senators in rush to pass budget vow to undo cut to military retirement pay
- Embassy Row: India strikes back over diplomat's arrest
Independent voices from the The Washington Times Communities
Politics, economics, and business from a real world perspective.
Television commentary, reviews, news and nonstop DVR catch-up by Lisa King Dolloff and friends.
Top 10 handguns in the U.S.
Extraordinary day at Redskins Park
White House pets gone wild!
Let it snow