PEORIA, Ill. — Caterpillar Inc.’s fourth-quarter profit dropped 32 percent as the global economic slowdown sapped demand for heavy equipment, forcing the company to lower its 2009 profit expectations and make further job cuts that will ultimately wipe out 20,000 positions.
Earnings for the world’s largest maker of mining and construction machinery fell far short of expectations as customers pulled back on purchases of equipment used to mine quarries and help build homes, highways and offices. Demand hit a wall in the last month of the year, weighed down by slumping commodity prices, tight credit markets and weak homebuilding.
Caterpillar, an economic bellwether and component of the Dow Jones industrial average, reported fourth-quarter earnings of $661 million, or $1.08 per share, on Monday, down from $975 million, or $1.50 per share, a year earlier. Overall sales rose 6 percent to $12.92 billion.
Analysts, on average, expected earnings of $1.31 per share on revenue of $12.84 billion, according to a survey by Thomson Reuters.
Shares of Caterpillar, which makes yellow-and-black backhoes, tractors and paving machines and offers loans to customers, fell $2.99, or 8.4 percent, to $32.67.
Earlier, they set a 52-week low of $31.70.
In response to worsening conditions, Caterpillar disclosed nearly 20,000 job cuts, most of which have already been made.
Of the total, about 5,000 are new layoffs of white-collar workers, which will occur globally by the end of March.
