Caterpillar hit by China bill

City A.M. Reporter
CATERPILLAR, the world’s largest maker of construction equipment, posted a 55 per cent drop in quarterly profit yesterday due to a charge connected with accounting fraud at a Chinese subsidiary and weak demand among its dealers.

Caterpillar’s machinery has been accumulating in warehouses due to slowing economies in China, Europe and the US. Quarterly results were hit by a charge of 87 cents per share after the firm discovered accounting fraud at a Chinese coal mining supplier it bought last year. For the fourth quarter, it posted net income of $697m, compared with $1.55bn in the year-ago quarter.

Wall Street looked past the China accounting fraud mess, sending shares higher.