NEW YORK (CNN/Money) - Caterpillar Inc. said Tuesday its first-quarter profit fell by more than half from a year earlier, missing Wall Street estimates as the firm continued to struggle with a sluggish economy.

Shares of Caterpillar (CAT: down $1.34 to $56.65, Research, Estimates), a component of the Dow Jones industrial average, lost more than 2 percent in Tuesday trading.

The world's largest maker of heavy equipment reported earnings of $80 million, or 23 cents a share, down sharply from $162 million, or 47 cents a share, a year earlier. Analysts on average forecast a profit of 24 cents a share, according to earnings tracker First Call.

It marked the third time in five quarters that the company has missed the consensus First Call forecast.

Revenue fell to $4.4 billion from $4.8 billion, also missing the First Call forecast of $4.6 billion.

The company also said it expects full-year sales to be about flat with a year ago and earnings to be up slightly, largely on the strength of cost cuts. First Call forecasts full-year earnings per share of $2.67, up from $2.60 in 2001. Revenue is forecast to fall about 5 percent to $19.5 billion from $20.5 billion last year.

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Caterpillar's machinery and engine sales fell 16.8 percent in North America but were relatively flat in overseas markets, as a drop in European, African and Middle Eastern sales was balanced by gains in Latin America, Asia and the Pacific regions.

"These results are in line with our expectations for a slower first half of the year and demonstrate our ability to perform well, even when many of the major industries we serve continue to be depressed," CEO Glen Barton said.

Alexander Blanton, an analyst with Ingalls & Snyder LLC, told Reuters he believes Caterpillar's forecast is conservative and the depressed machinery market could begin to recover in coming months.

"It's an economically sensitive stock and the economy is recovering," he said. "I think things will probably turn out better than they forecast."