Caterpillar’s Fourth-Quarter Profit Drops 65%

Heavy equipment and diesel engine maker Caterpillar Inc.’s fourth-quarter profit fell 65% to $232 million, or 36 cents a share, from $661 million, or $1.08, a year ago.

Fourth-quarter sales fell 39% to $7.9 billion, the company said Wednesday.

The company said it expects its 2010 sales and revenue would be up 10% 25% over 2009, while its profit would be $2.50 per share.

Full-year profit fell 75% to $895 million, or $1.43 per share, from $3.6 billion, or $5.66 the previous year, while sales fell 37% to $32.4 billion.

The company cut more than 20,000 jobs last year as customers cut back on equipment purchases, the Associated Press reported.

Caterpillar said dealers cut new machine inventories by more than $3.3 billion and new engine inventories by more than $600 million last year.

The company said it sees signs of economic improvement, particularly in China and most developing countries, and is also seeing signs of improvement in North America, Europe and Japan, though those economies remain weak and have not rebounded as quickly as developing countries.

Caterpillar said in 2008 that it plans to pull out of the North American Class 8 truck engine market by this year except for a truck and engine in partnership with Navistar International Corp.