NEW YORK (CNN/Money) - Caterpillar Inc. reported sharply lower second-quarter results that badly missed Wall Street expectations and said it expects full-year revenue and profit to trail 2001 levels.

The Peoria, Ill.-based heavy equipment maker earned $200 million, or 58 cents a share, down from net income of $271 million, or 78 cents a share, a year earlier. Analysts surveyed by earnings tracker First Call had a consensus forecast of 73 cents for the period.

Shares of Caterpillar (CAT: Research, Estimates), one of four components of the Dow Jones industrial average set to release results Tuesday, lost $1.69, or 4 percent, to $43.50 in pre-market trading Tuesday following the report. The shares lost 31 cents in regular-hours trading Monday.

The company saw both profit and sales drop in both its machinery and engine division. Its Cat Financial unit saw before-tax profit drop 51 percent to $33 million, but most of that decline was due to recognition of $40 million in "other than temporary" declines in value of market securities.

Revenue fell to $5.29 billion from $5.49 billion a year earlier. That narrowly beat the First Call forecast of $5.27 billion.

The company said full-year earnings should be about 15 percent below year-earlier levels. The company earned $2.60 a share excluding special charges in 2001, so a 15 percent decline would come in at about $2.21 a share, below the current First Call forecast of $2.49 a share. It also said it now expects full-year revenue below 2001's. Analysts already had forecast a drop in revenue to $19.0 billion from $20.5 billion in 2001.