WASHINGTON – Two months ago, President Barack Obama visited the Peoria, Ill., headquarters of Caterpillar and declared that “you can measure America’s bottom line by looking at Caterpillar’s bottom line.”
Tuesday Caterpillar issued its earnings report for the first three months of the year and the bottom line was not pretty. The heavy-equipment maker, which Obama had visited while campaigning for his stimulus bill, posted its first quarterly loss in 16 years, saw sales slump 22 percent and slashed in half its January forecast for this year’s profits.
“A great deal of uncertainty exists in the global economy, making it extremely difficult to know how our customers will respond during the remainder of 2009,” Caterpillar chief executive Jim Owens said in a statement.
About halfway through the corporate earnings season, the profit and loss statements of the world’s biggest businesses – Coca-Cola to DuPont, Alcoa to Nokia and Intel to Merck – have provided ample evidence that the economy has suffered one of its sharpest downturns since the 1930s.
The severe recession has taken a toll on workers and employers alike. Caterpillar, for instance, has cut 10,000 full-time jobs since the end of 2008 and dropped 15,000 part-time and contract employees. The maker of tractors and bulldozers said in a news release Tuesday that “depending on business conditions, more layoffs and reductions may be required as the year unfolds.”
Uncertainty about future business conditions has been a refrain for America’s corporations. Many companies say they aren’t sure whether the economy is hitting bottom and they are waiting for government stimulus and lending programs to take hold.
What glimmers of good news have arrived in recent days have often involved companies reporting profits that exceed the low expectations of analysts. Some firms see signs that the economy is turning around and that inventories of unsold goods have been reduced.
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