Caterpillar Inc. (CAT) 4Q Earnings Fall On China Write-Down; Warns Of Weak 2013

Caterpillar Inc. (NYSE: CAT), the world's largest maker of construction and mining equipment, said its fourth-quarter net income fell by half after it took a big write-down related to the uncovering of accounting misconduct at a unit of ERA Mining Machinery Ltd (HKG: 8043), which Caterpillar acquired last year.

For this year, the company projected per-share earnings of $7 to $9 on revenue of $60 billion to $68 billion. Analysts polled by Thomson Reuters recently expected $8.54 and $65.12 billion, respectively.

“Caterpillar offers a wide 2013 EPS guidance range that may result in no guidance cuts this year depending on economic sentiment,” Lawrence T. De Maria, a New York-based analyst for William Blair & Co who has a buy rating on the shares, said in a note to clients.

Chairman and Chief Executive Doug Oberhelman said the first half of 2013 will not be as prosperous as a year earlier. Both 2011 and 2012 started with early, strong global growth, though it later faded in the summer. Caterpillar expects gains in its sales and profit in 2013 to come in the second half as the world economy improves.

“Overall, we expect the world economy will begin the year with weak growth and improve as 2013 unfolds,” the company said in a statement.

For the fourth quarter, the Peoria, Ill.-based Caterpillar reported a profit of $697 million, or $1.04 a share, down from $1.55 billion, or $2.32 a share, a year earlier. The most recent quarter included a charge of 87 cents per share to write down the purchase of Zhengzhou Siwei. Not counting that, analysts surveyed by FactSet had been expecting a profit of $1.70 per share.

Revenue fell 7 percent to $16.08 billion as dealers reduced inventory.

For all of 2012, Caterpillar’s profits rose 15 percent to $5.68 billion, or $8.48 per share, up from $4.93 billion, or $7.40 per share, in 2011. Revenue rose 10 percent to $65.88 billion, from $60.14 billion.

Shares of Caterpillar Inc. (NYSE: CAT) rose 2.09 percent, or $2, to $97.58 in Monday’s morning trading.