Caterpillar profit misses, shares fall

Heavy machinery maker Caterpillar Inc disappointed Wall Street with a second-quarter earnings miss on Friday, hurt by higher costs for raw materials and labor, and its shares fell 6.5 percent in morning trading, dragging down the U.S. stock market.

The maker of equipment used in mining and construction also said economic growth in the United States and other developed economies was weaker than expected and reported signs of a slowdown in China.

Although Caterpillar raised its full-year sales and profit forecasts, the midpoint of its new range was below analysts' estimates. Shareholders also noted a more cautious tone in the company's economic commentary, closely watched by investors in economically sensitive manufacturing and transport stocks.

Caterpillar shares were down $7.12 to $104.49 in morning trading, and other industrial stocks also fell.

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- Posted: 2011-07-22 12:09:04

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