Monday, September 24, 2012

Caterpillar Cuts Forecasts on Weak Global Economy

Caterpillar, the world's largest maker of earth-moving equipment, has cut its 2015 earnings forecast, citing weak global economic conditions that are hampering its expansion into mining and China.
The company expects to earn $12 to $18 per share in 2015, it told analysts during a presentation in Las Vegas on Monday.
Caterpillar [CAT  90.87    -0.85  (-0.93%)   ] had previously forecast 2015 earnings of $15 to $20 per share.
Caterpillar shares fell 2.3 percent to $88.80 in after-hours trading on Monday.
Prices for coal and iron ore have dropped more than 20 percent this year, causing many of Caterpillar's customers in the mining sector to rethink capital expenditures. The slump in commodity prices comes a year after Caterpillar paid $7.6 billion for mining equipment maker Bucyrus International.
"We've seen a slowing in economic growth more than we expected," Caterpillar CEO Doug Oberhelman told analysts and reporters on Monday. "We expect fairly anemic and modest growth through 2015."
The Bucyrus deal was the largest in Caterpillar's history, adding mining shovels and draglines to the company's lineup of trucks and excavators to become the world's largest producer of mining equipment. Given the weak economy, though, some on Wall Street have questioned the timing of the deal. 

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