CHICAGO — Caterpillar Inc., the worlds largest maker of construction and mining equipment, reported a fourth-quarter profit that topped analysts estimates.
Net income fell to $1.04 a share from $2.32 a year earlier. Profit excluding a $580 million write-down on its ERA Mining Machinery Ltd. unit in China was $1.91 a share, the Peoria, Ill.-based company said in a statement Monday. The average of 22 estimates compiled by Bloomberg was for $1.70. Sales fell to $16.1 billion, matching the average of 14 estimates.
The company forecast 2013 earnings of $7 to $9 a share on sales of $60 billion to $68 billion. The average of the estimates was for a $8.54 per-share profit on sales of $65.2 billion.
The recovery in U.S. building and a wave of emerging-market infrastructure projects are softening the effect of cutbacks in mining capital expenditure. U.S. construction spending climbed 7.7 percent in November, the latest government data show. Brazil plans to spend $491 billion on projects ahead of the 2014 soccer World Cup and 2016 Olympics. Chinas next premier, Li Keqiang, is championing urbanization in a country that is already the worlds biggest user of construction equipment.
The North American market has legs to grow from replacement demand before a broader-based recovery takes hold, Larry De Maria, a New York-based analyst for William Blair & Co. said in a Jan. 23 report. The Brazil and China construction equipment industry has experienced a very soft 2012, but these regions should be flat to up this year.
Caterpillar employs several thousand workers in North Carolina at a half-dozen locations, including sites in Clayton, Sanford and Winston-Salem.
Chinas economic expansion accelerated to 7.9 percent in the fourth quarter after slowing for seven straight quarters. Coal imports by the country, which is the biggest producer and user of the commodity, rose 31 percent in December to a record 35.1 million tons, according to government figures.
The signs of improvement in China may provide some grounds for optimism for Caterpillar, which has suffered from excess inventories and manufacturing capacity in the country. Chinese excavator sales in December fell for the 20th consecutive month and were down 35 percent last year, according to China Construction Machinery Business Online.
Caterpillar said Jan. 18 it found deliberate, multi-year, coordinated accounting misconduct at ERA, which it acquired in October for $793 million.
The discrepancy was uncovered at ERAs Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. unit, which manufactures coal-mining equipment. Caterpillar said it removed senior managers at Siwei and put in place a new leadership team.
Staff writer David Bracken contributed