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Caterpillar sinks on lowered forecast ... for 2015?

September 25, 2012: 4:42 PM ET

In a world fraught with uncertainty and volatility, the executive team at Caterpillar (CAT) can evidently see the future -- three years into the future. The equipment maker slashed its revenue and profit forecasts for 2015. It cited the likelihood of "modest" economic growth at an industry conference this week.

Should growth fall farther than the company's modest predictions, Caterpillar's CEO Douglas Oberhelman promised that investors would still find reasons to love the company and its performance: "Caterpillar is ready to act if we enter a recession," said Oberhelman in a press release. "We don't think it's likely, but if it happens, we are prepared to react and would expect to remain attractively profitable and to maintain our dividend."

Caterpillar's stock slipped more than 4% Tuesday. Some traders on StockTwits traders expressed bemusement at the company's decision to project that far ahead.

hml5bcp: $CAT HOW THE HELL does cat know what its gonna do 2 1/2 years from now still those projections ain't bad give me a break still cheap

The company's updated forecasts appeared to raise more questions than they answered.

NAPManagement: Just a minor detail... If China is launching an infrastructure spending plan than why is$CAT lowering 2015 guidance? 1 + 1 ≠ 2 ?

Anne1018: Weird that $CAT$INTC$FDX and now Europe are all losing market share at the same time (thus having to warn)

Intel (INTC) and FedEx (FDX) cut guidance earlier this month. Lower projections from them, as well as Caterpillar, do paint a sad picture for future economic growth in Europe and the rest of the world.

RedBrgCptL: Back in my day when a leading indicator such as $CAT is pricing in a global recession we sold the market. $ES_F #BernankePonzi

Well, stocks were down Tuesday afternoon. The Dow fell more than 100 points in large part due to Caterpillar's drop. Some investors even think Caterpillar's stock still has room to run.

investorsmosaic: My bet, $CAT finishes flat or higher tomorrow. Too many shorts in this, and the news wasn't that bad. Many people expected this.

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Maureen Farrell
Maureen Farrell
Staff writer, CNNMoney

Maureen Farrell is a staff writer at CNNMoney and covers Wall Street, banking, mergers and the stock and bond markets. Prior to joining CNNMoney, she covered venture capital and entrepreneurs for Forbes, and mergers and bankruptcy for Mergermarket and Debtwire, both divisions of the Financial Times.

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