NEW YORK (AP) -- Farm and construction equipment maker CNH Global NV said Tuesday that its fourth-quarter profit fell 8 percent from a year ago and said demand for farm equipment could be flat this year.
While the Netherlands-based company's financial results beat expectations, investors were concerned by its profit margins and its outlook for 2012, William Blair analyst Lawrence T. De Maria said in an e-mail.
The company, whose brands include Case and New Holland, expects demand for farm equipment will be flat to up 5 percent in 2012 while demand for construction equipment will rise by between 15 percent and 20 percent.
Its U.S.-traded shares fell more than 10 percent in afternoon trading Tuesday.
CNH Global said net income fell to $193 million, or 80 cents per share, for the quarter ended Dec. 31 compared to $209 million, or 87 cents per share, during the prior year period.
Equipment sales revenue rose to $4.77 billion from $3.76 billion during the prior year period.
Analysts surveyed by FactSet expected earnings of 72 cents per share on $4.39 billion in revenue.
CNH Global said that during the fourth quarter, its operating profit margin on farm equipment dropped to 6.5 percent from 7.1 percent a year ago.
Analysts were even more concerned about margins for construction equipment, according to De Maria. The profit margin on that equipment improved, but was still negative, with the margins being negative-0.3 percent compared to negative-4.5 percent a year earlier.
"The company had negative (operating) margins in construction when it should be turning the corner," De Maria wrote.
For the full year, CNH Global reported net income of $939 million, or $3.91 per share, compared to $452 million, or $1.89, in 2010. Equipment revenue for 2011 rose to $18.06 billion from $14.47 billion a year earlier.
Shares of CNH Global dropped $4.81, or 10.3 percent, to $41.71 in afternoon trading.
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