Caterpillar slashes forecast again, sees weaker economy
By Ernest Scheyder
(Reuters) - Caterpillar Inc (CAT.N: Quote), the world's largest maker of tractors and excavators, slashed its 2012 forecast for the second time this year and warned the global economy was slowing faster than it had expected.
The caution sign was the latest in a string of comments from multinational manufacturers, including General Electric Co (GE.N: Quote) and Honeywell International Inc (HON.N: Quote), that the economic recovery remains tenuous and tepid at best.
Caterpillar's retail dealers are selling off inventories, rather than buying new machines, forcing the company to idle some production at plants earlier this year with additional shutdowns coming, executives said on Monday.
"As we've moved through the year, we've seen continued economic weakening and uncertainty," Chief Executive Doug Oberhelman said in a statement.
Caterpillar does not expect the global economy to begin to improve until the second half of 2013, he added.
Shares were up 0.4 percent at $84.22 on Monday afternoon after a drop of nearly 2 percent at the opening bell.
Analysts and investors said the stock, down more than 20 percent in the past six months, appeared to be a good buying opportunity given Caterpillar's strong growth prospects after the world economy recovers.
"The next couple of quarters will be tough-going, but longer-term I don't think their competitive position is threatened," said Morningstar analyst Adam Fleck. "They're still globally the world leader, and this isn't an industry that is going away." Continued...