Don’t expect any stimulus efforts here or in China to quickly spur demand for new earth-movers. Caterpillar, which just came out with mediocre Q4 earnings, offers a pretty dire outlook for 2009. The company expects EPS of around $2.50, which is well below the $4.32 currently expected by analysts.
And the company will contribute to the rolls of the rust-belt unemployed:
We have initiated actions which will remove about 20,000 workers from our business and every indirect spend dollar will be heavily scrutinized. These actions support lowering our production costs in line with a 25-per cent decline in sales volume and reducing Selling, General and Administrative (SG&A) and Research and Development (R&D) costs supporting our Machinery and Engines business by about 15 per cent.
This is a pretty severe shift from the company’s October outlook, which called for flat earnings. But then October seems like a lifetime ago now.
Shares are off 15% pre-market.
(CAT CEO Jim Owens will be on CNBC at 2:00 PM ET — we’ll be checking it out)