Caterpillar earnings below expectations
Market watch top headlines
NEW YORK CITY, Jan 28 AFP
January 29 2013, 00:52AM
The US construction equipment group Caterpillar has posted a 15 per cent rise in 2012 net profit, but that was below market expectations owing in large part to a charge of $US580 million ($A557 million) that arose from accounting fraud at the group's new Chinese unit Siwei.
Caterpillar's net profit rose to $US5.68 billion, a statement said, though the figure for earnings per share, which is closely watched by investors, came to $US8.48, while analysts had pencilled in EPS of $US9.12.
The group, which is an earnings bellwether for the construction industry, had already warned in late January that it would book a charge of $US580 million linked to the situation at Siwei.
Caterpillar said then that it had uncovered "accounting misconduct" at Siwei Mechanical and Electrical Manufacturing Co, which it bought last year for at least $US650 million.
Caterpillar, one of the first US manufacturers to start exporting to China nearly four decades ago and which opened its first Beijing office in 1978, said it had removed several top Siwei managers for overstating profits.
The problems cut the US group's fourth-quarter net profit by more than half to $US697 million, or $US1.04 per share, whereas sector analysts had expected fourth quarter EPS to amount to $US1.70.
Caterpillar sales for all of 2012 gained 10 per cent meanwhile, to $US65.87 billion, just a little better than an average market forecast of $US65.75 billion.
For the fourth quarter, sales amounted to $US16.07 billion, slightly below forecasts.
For 2013, the company forecast EPS of $US7.00-$US9.00 and sales of between $US60 billion and $US68 billion.