Caterpillar Swings to First Quarterly Loss in 17 Years, Lowers Guidance
The world's biggest producer of construction and mining machinery, Caterpillar ( CAT), reported its first quarterly loss since 1992, after the bell on Monday. The Peoria, Ill-based company posted a fiscal first quarter net loss of $112 million, or 19 cents a share, compared with a profit of $922 million, or $1.45 a share, in the year-ago period. Sales fell sharply in the quarter, down 22% from year-ago levels. Caterpillar has struggled during the recent economic turndown, as slowing sales have forced the company to lay off more than 25,000 workers recently. Those recent layoffs led to $558 million in charges for the company, which greatly contributed to its quarterly loss. Disregarding those one-time charges, the company would have earned 39 cents per share. That number easily bested analyst estimates of 2 cents per share. Caterpillar greatly reduced its full-year 2009 guidance, cutting its estimate in half. It now expects $1.25 per share, before restructuring costs, on sales of $31.5 billion to $38.5 billion. In January, the company originally forecast $2.50 per share on sales of $36 billion to $44 billion. The company said it would take further steps to conserve cash, including suspending stock repurchases and cutting capital expenditures by $3 billion. It would not rule out further job cuts. Caterpillar shares fell 86 cents, or -2.8%, in morning trading Tuesday. We removed shares of CAT from our "Recommended" list on July 15, when the stock was trading at $67.04. The company has a 5.51% dividend yield, based on Friday's closing stock price of $30.48.