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CAT 2Q tops Street
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July 17, 2001: 1:13 p.m. ET
Heavy equipment maker posts lower earnings but beats estimates
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NEW YORK (CNNfn) - Caterpillar Inc. posted sharply lower second-quarter earnings Tuesday, though the heavy equipment maker beat Wall Street expectations for the period.
The company earned $271 million, or 78 cents a diluted share. Analysts surveyed by earnings tracker First Call had forecast earnings per share of 71 cents, down from 90 cents in the year-earlier period.
Shares of Caterpillar (CAT: up $3.13 to $53.50, Research, Estimates), one of six components of the Dow Jones industrial average set to report results Tuesday, gained more than six percent in midday trading.
"I think the market had a concern that Caterpillar wasn't going to beat the numbers," said Prudential Securities analyst Andrew Casey. "This clearly shows they have an ability to not only meet the numbers, but beat them."
Revenue rose to $5.49 billion from $5.36 billion. The company said it was helped by strength in electric power and heavy construction, coupled with improved demand from coal mining, oil and gas customers.
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The Peoria, Ill.-based company said it was hit by what it termed a "collapse" in North American truck engine demand and prolonged weakness in general construction.
Still, Caterpillar said it expects to achieve its previously-stated full-year sales and profit outlook, which would be a bit better than current forecasts.
The company said in January it expected full-year profit to fall 5-to-10 percent from the $3.02 a share it earned in 2000. In April, it qualified that guidance to say it expected full-year earnings per share of between $2.72 and $2.87. First Call currently forecasts earnings of only $2.61.
Many of the industry's leading manufacturers have cut their quarterly or yearly earnings outlooks in recent weeks, including Minnesota Mining and Manufacturing Co. (MMM: up $2.36 to $112.41, Research, Estimates), heavy equipment maker Deere & Co. (DE: up $0.25 to $40.75, Research, Estimates) and tool- and controls-maker Danaher Corp. (DHR: down $0.83 to $56.35, Research, Estimates).
"It's very impressive that Caterpillar was able to buck the trend here in the manufacturing universe," said J.P. Morgan analyst Gary McManus. "I think everybody was kind of holding their breath."
First Call also forecasts that revenue for the year will fall to $19.2 billion from $20.2 billion a year earlier. The company said it expects sales to be flat. 
-- from staff and wire reports
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