Cat Stock Blog

CNH — the merged construction/agricultural equipment giant perhaps better known as Case New Holland — disappointed the markets with its earnings outlook today. At one point shares were down 30 percent. Notably, CNH would not offer guidance for this quarter. Wall Street hates that.

CNH said it expected the weakness in construction equipment sales that dogged the industry in 2008 to continue into 2009 in all major markets, including “significant declines in Western European and Latin American markets.” It also warned that the many infrastructure investment projects being unveiled around the world to pull local economies out of recession would do little to increase demand for new equipment.

“Although unprecedented levels of governmental stimulus actions are being enacted throughout the world, we expect that such actions will have an impact in late 2009 or possibly into 2010, and may only serve as an offset to new declines in other construction equipment market segments,” CNH said in a statement.

As a result, the company said it planned to idle its construction equipment factories “for much of the first half of the year.”

Caterpillar, which reports earnings Monday, was down as much as 7 percent this morning.

More on CNH at FinViz.

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.

The facts on Caterpillar’s Jan. 26 earnings announcement:

Caterpillar Inc. (NYSE: CAT) will release 2008 fourth-quarter and year-end financial results at 6:30 a.m. Central Time on Monday, January 26, 2009. The release will be available on http://www.CAT.com/earnings and the full text of the news release will also be available on PR Newswire at about 6:30 a.m. Central Time. The news release will be filed with the U.S. Securities and Exchange Commission (SEC) via a Current Report on Form 8-K (Form 8-K) on the date of the release or within four business days after the release, in compliance with applicable SEC rules.

Wall Street Journal has the details on listening in on the earnings call at 10 a.m. central time.