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Caterpillar cuts outlook after weak Q3 sales - TI forecasts lower-than-expected earnings

October 23, 2012

Caterpillar, the world’s biggest maker of construction and mining equipment often seen as a barometer for economic activity, cut its profit outlook for the second time this year (2012 EPS target of $9-9.25 on sales of around $66 bn, previous guidance: about $9.60 per share and $68-70 bn in sales).

Sales growth next year should be roughly the same as 2012, though it could be higher or lower by 5% (Bloomberg analyst consensus: +5.1%). Q3 profit grew 49% to $1.7 bn, or $2.54 a share, while sales climbed 4.6% to $16.4 bn (median estimate: $16.74 bn).

Texas Instruments forecast lower-than-expected Q4 results (23-31 cents a share, revenue of $2.83-3.07 bn, consensus: EPS of 37 cents and sales of $3.22 bn). “Orders slowed throughout the quarter and customers are giving the company very little indication as to when they might increase purchases,” CFO Kevin March said. Q3 net income was $784 m (+30%), or 67 cents (excl. one-off items: 45 cents, market view: 40 cents). Sales declined 2.2% to $3.39 bn (anticipated: $3.33 bn).