Chicago: Caterpillar Inc., the world's largest maker of bulldozers and excavators, is cutting 20,000 jobs as the recession saps demand for construction equipment. Profit this year may be $2.50 a share excluding some items, trailing analysts' average estimate.
The jobs number is a mixture of previously announced and new reductions, spokesman Jim Dugan said on Monday. Questions about the depth and duration of the US recession triggered a plan to cut production costs in line with a 25 per cent decline in sales volume, the Peoria, Illinois-based company said in a statement.
Chief Executive Officer Jim Owens, 63, is steering the company through the worst recession in a quarter century. Builders broke ground last month on the fewest houses since record-keeping began 50 years ago and the $44 billion for road, bridge and transit projects in President Barack Obama's stimulus package may not be enough to boost sales.
Fourth-quarter net income fell to $661 million, or $1.08 a share, from $975 million, or $1.50, a year earlier. Analysts, on average, estimated earnings of $1.30 a share. Their full-year profit forecast was $4.22 on average.
"Fourth-quarter profit was disappointing, particularly in light of record fourth-quarter sales and revenues and a significant favorable tax adjustment," Owens said in the statement.
Sprint Nextel Corporation is eliminating about 8,000 positions in the first quarter as it seeks to cut annual costs by $1.2 billion.
The third-largest US wireless provider said on Monday it will complete the layoffs largely by March 31. About 850 of the reductions are voluntary and the company said it expected a charge of more than $300 million for severance and other costs. The company is also extending a freeze on salary increases.
ING Groep NV, the biggest Dutch financial-services company, said it will cut 7,000 jobs and replace Chief Executive Officer Michel Tilmant after reporting a second consecutive quarterly loss.
The job cuts, equal to 5.4 per cent of the workforce, are part of a plan to reduce operating expenses by 1 billion euros this year, Amsterdam-based ING said today in a statement distributed by Hugin. Supervisory board Chairman Jan Hommen, a former chief financial officer at Royal Philips Electronics NV, will succeed the 56-year-old Tilmant.
"Developments that we have seen take place in the last couple of months really have taken a toll on Michel," Hommen, 65, said on a conference call. "It is clear that the environment in which we work today will continue to be challenging and that ING will need to have somebody and some people at the leadership to weather these difficult times."
Home Depot Inc., the world's largest home-improvement retailer, will cut 7,000 jobs, or 2 per cent of its workforce, as it exits its Expo business.
The measures will cost about $532 million before tax, of which $390 million will be recorded in the fourth quarter, Home Depot said today in a PR Newswire statement.
The Atlanta-based company also reiterated its earnings forecast for fiscal 2008, excluding costs related to the job cuts and other charges.
Royal Philips Electronics NV, Europe's largest maker of televisions, will cut 6,000 jobs and stop buying back shares after reporting its first quarterly loss in almost six years.
Philips rose as much as 10 per cent in Amsterdam trading, the most in almost three months, as cash-flow generation and net debt in the fourth quarter were better than some analysts had anticipated. Philips, led by Chief Executive Officer Gerard Kleisterlee, will halt its 5 billion-euro ($6.44 billion) share buyback "until further notice" to preserve cash.
"Stopping the buyback is the right path," said Eric de Graaf, an Amsterdam-based analyst at Petercam, who has an "add" rating on the stock. "If you don't know what's going to happen in these difficult circumstances, it's better to preserve your cash."
Philips on Monday posted its first quarterly loss since the first quarter of 2003 as the economic slump hurt the value of stakes in LG Display Co. and NXP BV. The planned firings come on top of the 3,000 jobs eliminated in the past quarter, spokesman Joon Knapen said.
Since announcing the buyback in December 2007, the Amsterdam-based company has repurchased 3.3 billion euros of shares, Knapen said.
Philips gained as much as 1.26 euros, the biggest intraday increase since Oct.29. It rose 87 cents, or 6.9 per cent, to 13.47 euros at 10:25 a.m. in Amsterdam. Before today, the shares had dropped 51 per cent in the past year, compared with a 47 per cent slide for the benchmark Amsterdam Exchanges Index.
Corus, Europe's second-largest steelmaker, said 3,500 jobs are at risk as part of a review as it slashes metal production in response to collapsing demand from builders and carmakers.
The review will raise annual operating profit by more than 200 million pounds ($275.5 million), the London-based unit of India's Tata Steel Ltd. said today in an e-mailed statement. Corus employs about 42,000 people in countries including the UK and the Netherlands.
Steelmakers are reducing output and the number of workers and canceling investment plans as the world tips into recession. Luxembourg-based ArcelorMittal, the world's biggest steelmaker, plans to eliminate as many as 9,000 jobs and curtail production by more than 30 per cent. Corus said yesterday its orders are down by a third due to an "unprecedented" fall in demand.