Dmitry Golitsyn of Moscow stands in a new latch free dipper at the Caterpillar booth during MINExpo International 2012 trade show at the Las Vegas Convention Center, in this September 24, 2012 file photo.STEVE MARCUS/Reuters
Caterpillar Inc., the world's largest maker of tractors and excavators, slashed its 2012 forecast for the second time this year as it warned the global economy was slowing faster than it had expected.
The company's retail dealers are selling off inventories, rather than buying new machines, forcing Caterpillar to idle some production, executives said on Monday.
"As we've moved through the year, we've seen continued economic weakening and uncertainty," chief executive officer Doug Oberhelman said in a statement.
Caterpillar does not expect improvement in overall economic growth until the second half of 2013, Mr. Oberhelman added.
The statement came despite better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment to repair crumbling infrastructure. Europe and parts of Latin America remained tough regions for Caterpillar.
The weakening euro zone is the "most significant" risk to the company's 2013 outlook, executives said. In an interview with CNBC, Mr. Oberhelman said, though, that China appeared "to be on the edge of something of a recovery."
Shares fell 1.1 per cent to $82.92 in premarket trading.
For the third quarter, the company posted profit of $1.7-billion, or $2.54 per share, compared with $1.14-billion, or $1.71 per share, in the year-ago period.
Excluding one-time items, the company earned $2.26 per share. By that measure, analysts expected $2.22, according to Thomson Reuters I/B/E/S.
Revenue rose 5 per cent to $16.45-billion. Analysts looked for $16.77-billion.
For 2012, the company now expects to earn $9 to $9.25 per share on sales of $66-billion. The company had looked for about $9.60 per share.
Analysts estimated 2012 profit of $9.40 per share on revenue of $67.64-billion.
In July, the company also cut its 2012 forecasts, and last month it slashed its 2015 earnings forecast, saying it expects demand for its products to fall more than previously forecast over the next few years, especially in the mining sector.
Peoria, Ill.-based Caterpillar announced a wave of senior executive retirements last week, including two members of its leadership team.