Caterpillar Profits Slip
PEORIA, Ill. (AP) _ Caterpillar Inc. reported a 1 percent dip in third-quarter profits Tuesday, blaming the decrease on weak foreign currencies and higher administrative and research costs.
The heavy equipment manufacturer reported net earnings of $216 million, down from $219 million in the same quarter last year. It reported per-share earnings of 62 cents, up from last year’s 61 cents; the increase in per-share results reflects a fewer number of Caterpillar shares outstanding.
The results beat Wall Street’s recently lowered expectations of 58 cents per share, according to First Call/Thomson Financial, but the numbers generated some skepticism among analysts.
``The real number is significantly lower than 62 cents (per share), said Joanna Shatney, an analyst for Goldman, Sachs and Co. She said Caterpillar’s per-share earnings would be 53 to 55 cents without being propped up by other income and a stock buyback of two million shares.
Third-quarter sales were $4.78 billion, up 1 percent from $4.72 billion in the same period in 1999.
Caterpillar shares closed Tuesday down $1.25 to $30.50 on the New York Stock Exchange.
The company last month warned that third-quarter earnings could be down as much as 15 percent, although Caterpillar still expects a moderate profit increase for the year.
``The third quarter was a challenging one, especially considering the continued strength of the dollar and softness in key markets,″ said Glen Barton, Caterpillar’s chairman and CEO. ``In response to these conditions, we have redoubled efforts to reduce costs to ensure we deliver acceptable results for the full year.″
For the first nine months, Caterpillar reported earnings of $789 million, or $2.25 per share, up from $707 million, or $1.97 per share, in the same period a year earlier.
Revenues came to $15.06 billion, up nearly 3 percent from $14.68 billion.
Caterpillar said it expects a slight increase in sales and revenue in 2001, primarily due to expected increases in sales in Europe, Asia and Latin American. North American sales are expected to decrease.