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Caterpillar digs a hole
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December 15, 1998: 10:39 a.m. ET
Earth-moving giant warns it feels 'uncomfortable' with 4Q profit outlook
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NEW YORK (CNNfn) - Shares of Caterpillar Inc. skidded 5 percent in early trading Tuesday after the company said it felt "uncomfortable" with analysts' forecasts of fourth-quarter earnings of $1.06 a share.
Instead, the Peoria, Ill.-based Caterpillar, the world's leading maker of earth-moving machinery, said it expects per-share profits to be "moderately less" than the 92 cents reported in the third quarter.
Caterpillar (CAT) shares were off 2-1/4 at 44 on the New York Stock Exchange Tuesday morning, well below a 52-week high of 60-3/4.
"A number of factors will adversely affect fourth-quarter results," the company said. "These include continuing high sales discounts, a relatively unfavorable product sales mix, the agreement with the EPA (Environmental Protection Agency), and an adverse tax adjustment at Shin Caterpillar Mitsubishi."
In October, Caterpillar agreed to pay a civil penalty of $25 million and invest $35 million over the next six years to develop technologies aimed at reducing emissions of oxides and nitrogen. Several other diesel engine makers also agreed to phase in stricter emission standards by early in the next century as part of the settlement with the EPA.
In another setback, Caterpillar in October slashed 65 jobs at its agricultural-equipment plant in Dekalb, Ill., amid softened demand for the company's Challenger tractor. The reductions represented nearly one-third of the facility's workforce.
Caterpillar makes a variety of earth-moving machinery used in construction, mining and agriculture under brand names such as Cat, Solar, and Barber-Green.
The company generates 71 percent of its roughly $18.9 billion in annual sales from machinery, 25 percent from engines, and 4 percent from financial engines.
In the third quarter, Caterpillar's profit slid 13 percent to $336 million, or 92 cents a share, missing Wall Street expectations of $1 a share. 
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Caterpillar
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