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Earnings outlook scary across industrial sector

Reuters reports on earnings expectations from big industrial companies, Caterpillar included.

Wall Street is braced for hefty profit drops across the industrial sector, with Caterpillar expected to report a 12.7 percent fall in per-share earnings, 3M seen down 21.8 percent and Textron Inc — which is facing deteriorating demand for corporate jets and pulling back from its finance operations — forecast down 55.9 percent, according to Reuters Estimates.

Analysts also look for profit declines at Harley-Davidson, Eaton, Illinois Tool Works, Paccar and Timken. Truck maker Oshkosh Corp (OSK.N) is expected to report a loss.

OK, so things are tough out there, but it turns out that Cat arch-rival Komatsu plans to expand its production in China:

Komatsu, the world’s No. 2 maker of earth-moving equipment after U.S.-based Caterpillar Inc, said it would move a factory making wheel loaders, hydraulic excavators and dump trucks to a new and larger site in Jiangsu province.

The new factory will start operations in 2010 with 15 percent higher production capacity than the old site, the company said in a release. It did not disclose how much this would increase the company’s overall output.

Komatsu’s announcement comes as a slowing global economy dampens sales in all major markets including China, which until recently seemed to have an insatiable demand for equipment due to the country’s construction boom.

Let’s not forget: Cat announced two new plants in the United States in the past month. The companies that keep their eyes on the ball and stick to their game plans through downturns are the ones that’ll be thriving when things turn around.

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Tom Mangan posted at 10:07 am January 20th, 2009 |

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