Caterpillar dealer report offers little hope for 3rd-qtr earnings

Reuters

* Unaudited dealer sales show weakness almost everywhere

* Asia, Latin America among the once-hot regions nowsuffering

* But signs of a nascent rebound in North America

* Report comes one day ahead of third-quarter earnings

By James B. Kelleher

CHICAGO, Oct 22 (Reuters) - Caterpillar Inc releasedunaudited dealer sales data on Tuesday - one day ahead of itsscheduled third-quarter earnings - that showed continued weakdemand for its machinery and engine products.

The Peoria, Illinois-based company, the world's largestmaker of construction and mining equipment, said global dealersales of its yellow earthmoving machines were down 9 percentyear-over-year in September.

While negative, that represented a modest improvement overAugust, when dealers reported that global equipment sales weredown 10 percent from a year earlier.

The slowdown in equipment sales continued to be particularlyacute in the Asia Pacific region, where sales tumbled 24 percentin September.

But for a second month in a row, the weakness spread toLatin America, a region that had been a bright spot for thecompany until recently.

One highlight in September was North America, whereequipment sales rose for a second month in a row, a reflectionof the nascent rebound in public spending on infrastructureprojects as well as the wobbly but ongoing recovery inresidential and nonresidential construction, according to theU.S. Census Bureau.

Caterpillar said global dealer sales of its gas turbines anddiesel engines and generators, meanwhile, were down 2 percentyear over year in September.

In August, those sales of so-called power systems were down6 percent.

In July, Caterpillar reported disappointing earnings andslashed its outlook for 2013, blaming steeper-than-expectedinventory reductions by dealers and a downturn in the globalmining industry.

At the time, the Peoria, Illinois-based company, which hadalready reduced its worldwide workforce by 8 percent over thepast year, warned the cost-paring would continue in the secondhalf - though it did not provide any details.

Caterpillar is expected to update investors on itsrestructuring program when it reports early on Wednesday.

Mining equipment is Caterpillar's most profitable productcategory. But sales to the sector have been hurt in recentquarters because miners, facing investor backlash over unpopulartakeovers, budget overruns and falling metal prices, haveslashed capital spending, slowed the development on someprojects and shelved others entirely.

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