Caterpillar 4Q Profit Falls 21%

Feb. 1, 2000
Stung by lower prices and a shift in sales to lower-margin machines, Caterpillar's fourth-quarter earning fell 21 percent to $239 million, and the manufacturer

Stung by lower prices and a shift in sales to lower-margin machines, Caterpillar's fourth-quarter earning fell 21 percent to $239 million, and the manufacturer warned that profit in 2000 will be below forecasts because of slumping sales.

For the third time in six months, Caterpillar, Peoria, Ill., lowered estimates for its sales outlook, but said overall results this year will be "slightly higher" than in 1999.

"We anticipate sales and revenues and profits will improve, with higher sales expected in every region of the world except North America," said chairman and CEO Glen Barton.

Caterpillar was unsuccessful in an attempt to raise prices last year as it tried to fend off competition from other manufacturers targeting the construction market.

"Once you've lowered prices, it's really tough to raise them again," said Morgan Stanley Dean Witter analyst Stephen Volkman. Prices for backhoes and dump trucks are expected to continue to fall as Tokyo-based Komatsu Ltd. and Germany's Volvo AB strive to increase market share in North America and Europe, analysts said.

For donating money and outdoor power equipment to assist in relief efforts after damage caused by Hurricane Floyd last year, Husqvarna was recently honored by the American Red Cross. The Charlotte, N.C., manufacturer sent people and equipment to cut and clear debris from wind-damaged areas.