Heavy machinery maker Caterpillar Inc has disappointed Wall Street with a second-quarter earnings miss and said economic growth in the US and other developed economies was weaker than expected, sending its shares down 7.5%.
The maker of equipment used in mining and construction raised its full-year sales and profit forecast and said its outlook for China remained positive despite some signs of a slowdown there.
But investors focused on the profit miss, partly caused by higher raw materials prices, and a cautious tone in the company's comments.
Net earnings rose 44% to $1.02 billion, or $1.52 per share, in the second quarter, from $707m or $1.09 per share a year earlier.
Excluding acquisition costs, Caterpillar earned $1.72 per share, 3 cents short of analysts' average forecast.
The company said the March earthquake in Japan reduced its operating profit by $60 million because it boosted costs. But the negative impact from Japan is now past, it said.
Second-quarter revenue rose 37% to a record $14.23 billion.
Caterpillar - whose rivals include Terex Corp, Manitowoc, Joy Global Inc, Volvo and Japan's Komatsu - said it expects its recently closed acquisition of mining equipment maker Bucyrus to add $2 billion to its sales this year. It estimated 2011 revenue of $54 billion to $56 billion.
Excluding acquisition costs, Caterpillar expects 2011 profit of $6.75 to $7.25 per share, raising its range by 50 cents on either end. Analysts expect $7.08.
