- Few Southeast students face suspension, expulsion for sexual assaults, campus paper finds (4/25/17)6
- Perryville family organizing bone-marrow drive Friday for ailing 6-year-old boy (4/26/17)
- Woman battered after smashing boyfriend's meth pipe against wall, police say (4/25/17)1
- Temptations bassist dies after Cape Girardeau show (4/26/17)2
- Event includes the first public tour of 200-year-old Elmwood Manor (4/23/17)3
- BBB warns Jackson man's online business might not be legit (4/24/17)
- Pilot House goes smoke-free (4/23/17)10
- State Supreme Court rules against congressman's mother in dog-kennel defamation case (4/27/17)1
- Strattman to step down as principal at St. Mary (4/28/17)1
- Cape couple turns their home into cozy, comfortable music venue (4/24/17)
Caterpillar third quarter profits drop 53 percent
Caterpillar expects sales of its big yellow-and-black equipment to improve next year as the world economy staggers out of a deep recession that slammed third-quarter earnings.
Already, signs are emerging that demand for its machinery is picking up in Asia. And Caterpillar, which generates about 70 percent of its sales overseas, wants it dealers prepared for an upturn. Shares of the company rose 2.3 percent in midday trade.
"We are seeing encouraging signs that indicate a recovery may be under way," CEO Jim Owens said after the Peoria, Ill., company posted third-quarter earnings.
He cautioned the world economy still faces significant challenges and that next year will remain difficult.
Those challenges dogged the world's largest maker of construction and mining equipment over the summer. With construction and mining still weak, global machinery sales fell by 48 percent in August, the 11th-straight month of declines. Big equipment dealers supplied customers by dipping into stockpiles rather than placing new orders. Sales languished and dragged down third-quarter profits 53 percent, despite large cuts in staff and production.
Overall sales slid 44 percent to $7.30 billion in the July-September period. Declines were led by Europe, Africa and the Middle East and followed by North America. Machinery sales dropped 52 percent, engine sales slipped 35 percent and finance revenue dipped 14 percent.
The quarter marked a sales "low point" in the recession, Caterpillar said.
However, Asia and the Pacific region saw sales drop the least amount: 26 percent. Machine deliveries in Asia's emerging markets have recovered from recession lows, with China hitting a new third-quarter high, helped by the country's economic stimulus policies.
With those signs of strength, the company boosted its 2009 profit forecast to a range of $1.10 to $1.30 per share, much higher than its earlier forecast of 40 cents to $1.50 per share.
Caterpillar also sees 2010 sales rising 10 percent to 25 percent compared with the midpoint of 2009, partly due to dealers using up their stockpiles.
Caterpillar has struggled with lower demand since the world economy worsened late last year. Lower prices for commodities such as iron ore, a key steel ingredient, have undercut orders for its giant mining trucks. A battered housing market also has eaten into the company's sales.
The company has responded by dramatically cutting production and laying off thousands of workers. Since spotting signs of a recession last year, the company has cut 16 percent of its work force, which now stands at just above 94,000.
Earlier this month, Caterpillar said it planned to raise prices by up to 2 percent worldwide -- an increase considered relatively modest, but evidence of stronger projected demand in 2010.
Analysts say renewed demand from developing countries such as China and Brazil, a weaker dollar that makes the company's products less expensive in overseas markets and rising commodity prices could brighten Caterpillar's prospects next year.
The company earned $404 million, or 64 cents per share, in the third quarter, compared with $868 million, or $1.39 per share, a year earlier.
Caterpillar's results are considered an indicator of global economic health because of the company's broad reach and diverse line of products, including bulldozers and engines that run oil drills.
Shares rose $1.29 to $59.09.