PEORIA, Ill. – Caterpillar Inc. reported its earnings edged up 4 percent in the third quarter but fell short of Wall Street expectations, and indicated earnings for the year will be below current estimates. Its shares skidded.
The Peoria-based heavy-equipment maker posted earnings of $222 million, or 62 cents a share, for the July-September period, up from $213 million, or 61 cents a share, a year ago.
Caterpillar said profits dipped because of a $40 million bond retirement charge. Without that charge, the company said earnings would have amounted to 73 cents a share.
But that was still short of the 74 cents a share expected by analysts surveyed by Thomson First Call. The forecast excludes one-time charges.
Revenue rose 9 percent to $5.55 billion from $5.08 billion in the same period last year.
In trading on the New York Stock Exchange, Caterpillar shares were down $4.02 to close at $74.33.
Company chairman and CEO Glen Barton said earnings rose because of increased machinery sales and a weak dollar. He said the report shows signs that the economy may be recovering.
“Our sales benefited from key market recoveries, as generally lower interest rates continued to spark construction spending and replacement buying,” Barton said.
Barton said the company still thinks revenues will be up about 10 percent for the year. He expects profits will end the year at about $3 a share, up from its earlier estimate of $2.75 to $2.90 a share. But analysts were looking for earnings of $3.15 a share.
Barton said the company’s cost-cutting efforts reduced operating expenses by $59 million in the third quarter. He said he expects that trend to continue as “employees look for efficiency gains in all aspects of our business.”
The company designs and produces mining and construction machinery, as well as engines for earth-moving and construction machines. It also is the world's leading manufacturer of electrical generators.
Source: Associated Press