Caterpillar to post wider loss, analyst says

Caterpillar Inc., the world's largest construction-equipment maker, will post a wider first- quarter loss than earlier expected as manufacturing operations reach a low, said Andrew Obin, a Bank of America Corp. analyst.

Caterpillar will post a loss of 23 cents a share, said Obin, who previously forecast a loss of about 11 cents. The average of 19 analysts' estimates compiled by Bloomberg is for profit of 11 cents. Peoria, Illinois-based Caterpillar is scheduled to report results on April 21.

The quarter "will mark the weakest performance by the company's manufacturing operations in the cycle," Obin wrote in a note to investors today.

Caterpillar will cut its quarterly dividend to about 10 cents a share from 42 cents in the second half of this year, Obin also predicted.

"We think that the dividend cut is widely anticipated by the market, and we would view it as an incremental positive because it would enable the company to conserve cash and strengthen its balance sheet," Obin wrote.

Caterpillar's 2009 profit will be about 55 cents a share, down from a previous estimate of $1.78, Obin said. He is maintaining his "neutral" rating on the stock. Analysts, on average, expect full-year earnings of $2.

Caterpillar declined $1.86, or 5.9 percent, to $29.45, at 4 p.m. in New York Stock Exchange composite trading. The stock has lost 62 percent in the past 12 months.