Caterpillar is expected to report a 40 percent decrease in profit as a steep drop in demand for mining equipment, especially from Chinese buyers, offsets modest increases in U.S. construction equipment sales. Reuters

Caterpillar Inc. (NYSE: CAT) Chief Exectutive Officer Doug Oberhelman has long been an optimist, but these days the head of the world's largest maker of construction and mining equipment been scaling back on his optimism.

The global economic outlook is more uncertain now than during late 2008, although the situation isn't as severe, Oberhelman told the Financial Times.

"There's never been a more unpredictable set of tea leaves than right now. Even in 2008 and 2009, U.S. housing was already dying and had been for two years. We saw that," Oberhelman is quoted as saying in the Financial Times.

"I don't think the situation is as grave as it was in 2008, but the uncertainty, the storm clouds are around things that none of us know about -- like what will happen with the political situation in Europe," he said.

Four years after the most serious economic crisis in Europe since World War II, the continent is once again sliding deeply into recession. The latest figures from the European Union Eurostat agency reveal that between April and June of this year, the combined economies of the 17 states constituting the euro zone declined by 0.2 percent compared to the first three months of 2012.

Oberhelman predicted that it could take another five years before Europe's economy begins to see growth again.

And it's not just Europe that Oberhelman is worried about.

Caterpillar said in May it expects the U.S. gross domestic product to expand by around 3 percent in 2012. Yet, the U.S. economy only grew at 1.9 percent in the first quarter and a tepid 1.5 percent in the second quarter. Still, many economists believe the third quarter could be even worse.

In its second-quarter earnings conference call last month, Oberhelman said the recent slowdown "doesn't feel like 2008" and that global economic growth in 2013 "is almost got to be better."

But unlike in previous quarters, Caterpillar this time gave a hedged outlook, which left investors feeling confused.

The Peoria, Ill.-based company raised its 2012 profit forecast, but at the same time lowered its sales guidance for the year.

Caterpillar now expects to book a profit of $9.60 a share in 2012, compared with a previous forecast of $9.50 a share. But the company cut the high end of its revenue guidance by $2 billion, now expecting $68 billion to $70 billion.

The company also emphasized that it is prepared to cut costs if the economy does weaken significantly.

On Friday, nearly 800 striking workers at a plant in Joliet, Ill., ended their three-and-a-half month strike, bowing to demands they accept reduced health-care and pension benefits and wage freezes for veteran workers.

"I can paint an optimistic picture and I can paint a pessimistic picture," Oberhelman said. "I think the glass is half-full, but it could be half-empty."

While Europe is the center of the turmoil, the slowdown in China has caught Caterpillar completely off guard.

The company has invested heavily in the country and other emerging markets. Two-thirds of Caterpillar's revenues come from outside of North America.

The manufacturer warned in April that it had overestimated Chinese demand for construction equipment, saying its inventories in the country were so high it would export 2,300 excavators from China to Turkey, the Middle East and Africa over the next few quarters.

Caterpillar's second-quarter profit jumped 67 percent and easily topped analysts' estimate. Revenue rose 21 percent to $17.37 billion. Analysts expected $17.11 billion. Caterpillar's results are watched closely because they are considered an indicator of industrial activity and the health of the overall economy.

Shares of Caterpillar Inc. (NYSE: CAT) fell 41 cents, or 0.46 percent, to $89.60 a share in Monday's morning trading. So far this year, the shares have lost 1.16 percent.

Caterpillar competes with machinery makers such as CNH Global NV (NYSE: CNH), Deere & Co. (NYSE: DE), Joy Global Inc. (NYSE: JOY), Cummins Inc. (NYSE: CMI) and Astec Industries, Inc. (Nasdaq: ASTE).