Caterpillar Inc., the world's largest maker of bulldozers and excavators, reported a decline in its fourth-quarter earnings of 65 percent and augurs its 2010 profit that trailed analysts' speculations.

"We're encouraged by signs of improving demand", Chairman and Chief Executive Jim Owens said. "Dealer sales to end users are up, order rates are up, dealer inventories came down in 2009, and we're seeing stronger service parts sales".

It reported its net income to squeeze to $232 million, or 36 cents a share, from $661 million, or $1.08 a share, the previous year, the Peoria, Illinois-based company claimed today in a statement.

Moreover, Caterpillar augurs its 2010 earnings to below Wall Street expectations. The company foresees earnings of $2.50 a share on a revenue increase of 10% to 25%. However, analysts surveyed by Thomson Reuters speculate a profit of $2.71 a share on 11% revenue growth.

Chief Executive Officer Jim Owens, who plans to relinquish this year, has reduced production and sacked 18,700 full-time employees and about the same number of temporary workers since December 2008 as well.

Caterpillar reported a profit of $232 million, or 36 cents a share, down from $661 million, or $1.08 a share, a year earlier. However, analysts speculate the earnings to be 28 cents a share on $8.11 billion.