Caterpillar Inc , the world's largest maker of construction and mining equipment, offered an unexpectedly guarded view of the coming year on Wednesday, sending its stock down more than 8 percent and pulling the broad market down along with it.

The cautious outlook from the bellwether company came as Caterpillar posted stronger-than-expected quarterly earnings and said it was seeing encouraging signs that economies around the world were rebounding from a recession that hammered its sales over the past year.

But the company, a component of the Dow Jones industrial average, also forecast 2010 earnings below the average Wall Street estimate. It said it now expects to report a profit of $2.50 a share on sales of $35.6 billion to $40.5 billion as the rebound from the recent global downturn favors some of its markets and products over others.

That was below the $2.71 a share profit analysts expected, according to Thomson Reuters I/B/E/S -- and well below the $3 a share whisper number that Eli Lustgarten, an analyst at Longbow Securities, said was circulating among some investors ahead of the forecast.

So they're offering a little more cautious outlook on profitability than some of the more optimistic analysts were hoping for, Lustgarten said.

Caterpillar said it expects the world economy to grow more than 3 percent in 2010, led by developing economies like China, which it said would grow more than 10 percent.

It warned that the United States, the world's largest economy, would grow just 3.5 percent, well below levels seen in past recoveries.

Caterpillar said a continued decline in nonresidential building construction, and delays in passing a highway bill, would likely will cause highway contractors to remain cautious about purchasing equipment.

That's bad news for Caterpillar and other makers of construction equipment, which are already grappling with a precipitous drop in sales to residential builders because of the collapse of real estate prices in North America and Europe.

The disappointing forecast came as Caterpillar reported a fourth-quarter net profit of $232 million, or 36 cents a share, down from $661 million, or $1.08 a share, a year earlier.

Sales fell 39 percent to $7.9 billion.

Stripping out costs associated with the company's restructuring, which involved the elimination of nearly 25,000 jobs worldwide, Caterpillar said it earned 41 cents a share.

On that basis, analysts, on average, expected the Peoria, Ilinois-based company to report a profit of 28 cents a share, on sales of $8.11 billion, according to Thomson Reuters
I/B/E/S.

Caterpillar, which has described the downturn in its business in 2009 as the worst since the Great Depression, said it was seeing encouraging signs of a rebound in interest for many of its products.

We have seen a marked increase in demand for mining equipment -- a result of continued strong commodity prices and growing confidence in economic recovery, Jim Owens, the company's chairman and chief executive, said in a statement.

Owens said the company had also seen an increase in sales of aftermarket service parts, which he said is usually an early indicator of growing demand for machines and engines.

But the company said that many of the factors that helped support earnings in 2009 would not be there in 2010, including

low income taxes and accounting benefits related to inventory

reductions.

In addition, it warned that sales of its higher margin products, including turbines and large reciprocating engines, would fall in 2010. It said the impact of improving demand for mining equipment is positive, but not enough to offset the significant negative factors.

In morning trading on the New York Stock Exchange, Caterpillar shares were down 8.4 percent at $51.16.

(Reporting by James B. Kelleher; editing by John Wallace, Dave Zimmerman)