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Caterpillar Posts Loss – Cuts Its Forecast

From the Wall Street Journal:

Caterpillar Posts Loss, Slashes Forecast


April 21, 2009

Caterpillar Inc. on Monday swung to a first-quarter loss, cut its full-year sales and profit forecasts, and said it underestimated the severity of the global economic downturn

The Peoria, Ill., company said the economic environment has deteriorated despite government stimulus efforts and a relatively bullish stance on commodity prices. Caterpillar expects the global economy to decline at least 1.3% this year, worse than its earlier expectations.

"A great deal of uncertainty exists in the global economy, making it extremely difficult to know how our customers will respond during the remainder of 2009," Chairman and Chief Executive Jim Owens said in a statement.

The heavy-equipment maker reported a first-quarter net loss of $112 million, or 19 cents a share, compared with year-earlier profit of $922 million, or $1.45 a share

Caterpillar cut its 2009 profit forecast in half to $1.25 a share on revenue of $35 billion. In January, the company said it expected to earn $2.50 a share on sales of about $40 billion.

Caterpillar expects total restructuring costs this year to reach $700 million. It is shedding about 25,000 jobs as it closes plants, shortens workweeks and cuts other costs.

Caterpillar predicted the U.S. economic stimulus program would have little effect on sales because the $70 billion designated for infrastructure construction isn’t enough to offset private-sector declines. It was more optimistic about overseas initiatives, notably in China.

The infrastructure and commodities boom powered Caterpillar for roughly five years–helping it more than double its annual revenue from 2002 to 2007–but collapsed late last year.

And here are a few more details, via Bloomberg:

Caterpillar Says Obama Stimulus Plan ‘Missed an Opportunity’

By Melita Marie Garza

April 21 (Bloomberg) — Caterpillar Inc., the bulldozer manufacturer President Barack Obama used to help push his $787 billion stimulus plan, called the program disappointing and less effective than measures approved by China.

The infrastructure portion of the stimulus package was disappointing in that it was less aggressive than other countries and missed an opportunity to correct past underinvestment in U.S. infrastructure,” Caterpillar said in economic commentary with today’s first-quarter earnings report.

Chief Executive Officer Jim Owens, 63, is a member of the president’s Economic Recovery Advisory Board. Obama visited the Peoria, Illinois, headquarters on Feb. 12, the final day of his campaign to press for Congressional passage. Caterpillar today reported its first net loss in 16 years as a global credit crunch and recession reduced demand from builders and miners.

“You can measure America’s bottom line by looking at Caterpillar’s bottom line,” Obama said during the February visit. “What’s happening at this company tells us a larger story about what’s happening in the American economy.” …

Remember, Caterpillar was to be Mr. Obama’s weathervane.

It was to be the poster child for a company that would benefit from the shovel-ready public works in the stimulus.

Well, look how it turned out.

This article was posted by Steve on Tuesday, April 21st, 2009. Comments are currently closed.

7 Responses to “Caterpillar Posts Loss – Cuts Its Forecast”

  1. proreason says:

    But Father Obama told us that he saved thousands of Catepillar jobs.

    The CEO that ordered thd job cuts must be guillotined for defying a president elected with an overwhelming majority.

    • Colonel1961 says:

      An overwhelming majority, indeed – almost eighty percent – and growing every day! By the end of his only term, the MSM will be reporting that he received 103% of the popular vote. No Chicago ‘dead-voting’ is even necessary when the media carries your water…

  2. catie says:

    Well this is interesting isn’t it? I cannot help but wonder what the poor “workers” are feeling having had their dreams raised by our Dear Leader but alas due to something George W Bush did their hopes were dashed. If it wasn’t so sad it would be funny.

  3. wirenut says:

    I think the term shovel-ready fits D.C. very well . The only ” thing ” their shoveling , comes out of the backside of a bull !!!
    Feel bad for the Cat people though .

  4. Confucius says:

    “The infrastructure portion of the stimulus package was disappointing in that it was less aggressive than other countries and missed an opportunity to correct past underinvestment in U.S. infrastructure . . . .”

    Another whore disappointed by its pimp.

  5. JohnMG says:

    Mr. Owens seems surprised. Here he pimped himself to help Obama get elected, and when he extended his hand expecting a reward, he found someone had given him a turd instead.

    He’s just one of a long list of CAPITALIST suckers who put his faith in a scheme that was too good to be true, expecting a free lunch. Now if he was a SOCIALIST………

    • Ulsterman says:

      John MG, Jim Owens is dead set against Obama. I don’t know where you got the idea “he pimped himself to get Obama elected”. My wife works for Caterpillar and during the campaign, she had a chance to talk to Jim Owens. He told her that an Obama presidency scared him. As an Illinois company CEO, Jim Owens is intimately familar with Illinois politicians and their stances on business. He is profoundly aware that Obama is anti-business, anti-private sector, anti-commerce. Jim Owens has a PhD in economics. He knows that Obama knows bupkis about the workings of a capitalist economy. He did not ask Obama to come to Peoria to speak Feb 12. As you may recall, Obama mischaracterized Jim Owens remarks regarding layoffs and rehiring following the passage of the Stimulus Bill. Mr. Owens is not gulled by Obama’s smooth talk and he knew the Stimulus Bill was a scam from the start. He serves on the Economic Recovery Advisory Board not because he’s an Obama supporter but because he’s keeping his enemy close at hand. Jim Owens is one of the good guys who is desperately trying to keep Caterpillar afloat is the face of incipient socialism.

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