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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (1451)	3/12/1999 1:06:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

Caterpillar Cuts Jobs, Expects 1st-Qtr Profit to Fall 50% Below Estimates Caterpillar Sees 1st-Qtr Profit 50% Below Estimates (Update3) (Updates share price.) Peoria, Illinois, March 12 (Bloomberg) -- Caterpillar Inc., the world's largest maker of construction equipment, said first- quarter profit will be half of analysts' estimates because of slow machinery and engine sales and weak Latin American economies. The company also said it will cut an unspecified number of jobs, trim spending and inventory, and may temporarily shut plants in the U.S., Latin America and Europe. Caterpillar shares fell 5 7/16, or 11 percent, to 45 7/16 in midday trading. It was the biggest decliner among Dow Jones Industrial Average companies. The first-quarter profit plunge is the latest disappointment for Caterpillar investors following a 33 percent drop in fourth- quarter profit caused by price-cutting and competition. Caterpillar said full-year 1999 profit will decline only 15 percent, though some analysts doubt it can manage even that. Caterpillar's annual sales haven't declined since 1991. ''Unless there's some extraordinary factors in this first quarter, I'm not exactly sure how the company rebounds to earn (the profit) for the full year that they're endorsing,'' Sanford C. Bernstein analyst Lisa Shalett said. She has a ''hold'' rating on the company. Caterpillar said first-quarter sales have been hurt by less demand from agricultural, mining, and oil and gas customers, as well as a recession in Brazil and contracting economies in other parts of Latin America. The Peoria, Illinois-based company was expected to have a profit of 84 cents in the first quarter, based on the average estimate of analysts polled by First Call Corp. It had a profit of $1.15 in the year-ago first quarter. Caterpillar said it will benefit from the cost cuts and stronger-second half results compared with the year-earlier period. For the full year, Caterpillar was expected to earn $3.60 a share, the average First Call Corp. estimate. It had a profit of $1.51 billion, or $4.11 a share, in 1998.