MINNEAPOLIS/WASHINGTON — U.S. orders for long-lasting manufactured goods rose sharply in December from November, helped by a strong gain in aircraft demand. But companies slowed orders for computers and other goods that signal investment plans. The Commerce Department said Monday that orders for durable goods increased 4.6 percent in December. The increase was driven by a 10 percent gain in aircraft orders. Still, demand for core capital goods, which indicates business investment plans, rose just 0.2 percent. That followed two straight monthly gains of 3 percent. Orders for durable goods, which are expected to last at least three years, can be volatile from month to month. Slower growth in business orders for long-lasting goods has hurt manufacturing, which struggled to gain momentum in 2012. While orders for durable goods rebounded in the final months of last year, economists expect the overall trend to stay weak this year. “The strength in durable goods orders for December is a most welcome development,” said Dan Greenhaus, an analyst at BTIG. “Going forward though, despite the better numbers, we still expect business investment … to slow yet again in 2013. This is a trend that remains in place given the weaker demand environment.” The economy grew at an annual rate of 3.1 percent in the April-June quarter. The government will provide its first look at overall economic growth in the October-December quarter on Wednesday. Many analysts believe growth slowed in the final three months of last year to less than 2 percent.
Caterpillar Q4 Earnings Fall By Half
Caterpillar’s fourth-quarter net income fell by half after it took a big charge for a deal in China that went bad, and because of slower growth in China and economic uncertainty in the U.S. and Europe. Still, its adjusted profit and revenue were better than analysts expected. And while cautious about the global economic outlook, Caterpillar expects conditions to pick up later in the year, outside of Europe. Shares rose 2.4 percent in premarket trading. U.S.-based Caterpillar Inc. makes construction and mining equipment as well as power generators, so its growth rises and falls with the world’s economy. For the fourth quarter, Caterpillar earned US$697 million, or US$1.04 per share. That was down from a profit of US$1.55 billion, or US$2.32 per share a year earlier. Revenue fell 7 percent to US$16.08 billion as dealers reduced inventory. The most recent quarter included a non-cash charge of 87 cents per share to write down the purchase of Zhengzhou Siwei. Not counting that, analysts surveyed by FactSet had been expecting a profit of US$1.70 per share. Caterpillar’s purchase of Siwei last year gave it a new business — roofing supports for mines — in a country where mining is growing quickly. But on Jan. 18, Caterpillar said it had found “deliberate, multi-year, coordinated accounting misconduct” in the accounting at Siwei, and said it will write down its investment in the company by US$580 million. It also said it dismissed several senior managers at the company. For this year, Caterpillar expects revenue of US$60 billion to US$68 billion, with a profit of US$7 to US$9 per share. Analysts had been expecting a profit of US$8.54 per share on revenue of US$64.58 billion. Caterpillar said there’s a wide range in its outlook because of the high level of uncertainty in the world. It expects relatively weak growth in the U.S. economy. Growth in China will improve, but not back to the levels seen in 2010 or 2011, Caterpillar said. For all of 2012, Caterpillar’s profits rose 15 percent to US$5.68 billion, or US$8.48 per share, up from US$4.93 billion, or US$7.40 per share, in 2011. Revenue rose 10 percent to US$65.88 billion, from US$60.14 billion.