Caterpillar posts record 3Q earnings but cuts full-year forecast |

Caterpillar posts record 3Q earnings but cuts full-year forecast

PEORIA, Ill. – Shares of Caterpillar Inc. tumbled more than 10 percent by midday Friday after the construction equipment maker posted record third-quarter earnings that nonetheless fell short of Wall Street’s expectations and reduced its profit forecast for the full year.Peoria-based Caterpillar, known for its trademark yellow bulldozers and other earth-moving equipment, said strong global demand and price increases helped push its earnings up by 34 percent to $667 million, or 94 cents per share, for the three months ended Sept. 30, from $498 million, or 70 cents per share, last year.Total sales and revenue climbed 17 percent to $8.98 billion from $7.66 billion a year earlier. Machine and engine sales rose worldwide, excluding an 18 percent engine sales dip in Asia, the company said.Analysts were expecting earnings of $1.06 per share on revenue of $8.47 billion, according to a Thomson Financial poll.Caterpillar stock slid $5.42 to $48.61 by midday on the New York Stock Exchange. Its shares have traded in a 52-week range of $38.38 to $59.88.Caterpillar said its operating costs climbed $303 million over last year to meet strong global demand for machinery and engines. The company said about 4,300 production workers were added and material costs rose. Delivery costs also increased because of higher fuel prices, the company said.A tax increase from 29 percent to 30 percent also cut into profits, the company said.The company cut its full-year forecast, saying it expects 2005 earnings of $3.85 to $4 per share, down from its previous estimate of $4 to $4.20 per share.Caterpillar said it lowered earnings expectations because of the higher tax rate and about $100 million in expected pretax expenses in the fourth quarter for changes in its dealer distribution software and a product realignment under consideration.Caterpillar said it expects revenue and sales to be up about 20 percent from 2004, rather than up between 18 percent and 20 percent.The company said it expects 2006 sales and revenue to grow about 10 percent from the previous year, with profit up 15 percent to 25 percent from the middle of its 2005 earnings outlook. Based on the company’s 2005 guidance, that implies a 2006 profit estimate of about $4.51 to $4.91 per share.”The company is well positioned for continued profitable growth. … Caterpillar is ready for the challenges ahead,” Chairman and CEO Jim Owens said in a statementAnalysts expect 2006 earnings of $4.83 per share on revenue of $36.59 billion.—On the Net:

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