Caterpillar Hurt by Falling Orders

Caterpillar Inc., hurt by weaker demand in Asia and North America, recorded a decline in its dealers' sales for the three months ended Dec. 31.

Global sales of machinery, such as excavators and bulldozers, fell 1% from a year earlier, while engine sales declined 2%, the Peoria, Ill.-based company said Friday. The decline in global machine sales was the first since the three months ended in April 2010.

Machinery sales growth, which surged after the end of the 2008-09 recession, has been slowing over the past year at Caterpillar, the world's biggest maker of construction and mining equipment. For the three months ended November 30, those sales were up 5%.

One factor, said Rob Wertheimer, an analyst at Vertical Research Partners in New York, is that the December 2011 levels were relatively high, making it harder for Caterpillar to reach the year-earlier pace. He called the latest data "a modestly negative surprise."

Caterpillar is due to report fourth-quarter results Monday and discuss the outlook for this year. Analysts are expecting 2013 to be rocky. According to Factset, the Wall Street consensus for Caterpillar's full-year earnings in 2013 is $8.58 a share, down from an estimated $9.14 a share for 2012. It isn't clear to what extent the 2012 estimates reflect Caterpillar's recently announced plan to record a write-down of 87 cents a share in the fourth quarter on the value of a soured acquisition in China.

In 2011, Caterpillar had earnings of $7.40 a share.

A drop in investment by mining companies has squeezed Caterpillar. The company also is faced with an industry-wide glut of unsold construction machinery in China and hesitancy among U.S. buyers of equipment caused by uncertainty over U.S. budget deficits and taxes.

In the latest three months, Caterpillar's machinery sales were down 6% in North America and 7% in the Asia-Pacific region. But they were up 14% in Latin America. Globally, sales of industrial engines fell 20%.