A rally in CNH Global shares went into reverse gear after the tractor maker marred better-than-forecast quarterly revenues by unveiling a surge in costs too, and forecasting a sharp market slowdown.
The maker of Case and New Holland farm equipment lifting equipment revenues by 27% to $4.77bn in the October-to-December period, more than $300m ahead of Wall Street estimates, and taking the result for the quarter above that achieved in the boom year of 2007 for the first time.
Sales in North America were particularly strong, soaring 36% to $1.99bn.
However, headline costs rose by 27% too, to $3.95bn, faster than the market had anticipated, and limiting the impact on earnings of the strong revenues.
Earnings fell 7.7% to $193m and, excluding one-off items, dropped to $0.79 on a per share basis, from $0.90 a year before.
And, for 2012, CNH forecast a marked slowdown in the agriculture market, its main earner, and construction.
Industry farm equipment sales will rise by at best 5% this year, and potentially stagnate, following 12% expansion in 2011. For construction, the market's growth will slow to 15-20% from 27%.
CNH's industry volume forecasts for 2012 and (2011 performance)
Worldwide tractors: 0-5%, (+12%)
North America tractors: flat, (+2%)
Europe, Africa, Middle East, former Soviet Union tractors: flat, (+25%)
Latin America tractors: -5-10%, (-2%)
Asia Pacific tractors: +5%, (+12%)
Worldwide combines: 0-5%, (+16%)
Growth in the European and former Soviet Union region, where industry-wide combine sales soared 39% last year, will all but disappear.
And CNH estimated its growth in equipment revenues at 5% in 2012, well below the full-year pace of 25% achieved in 2011.
The comments, the first released with Richard Tobin as chief executive, failed to meet the lofty expectations of investors who had sent CNH shares soaring 29% in 2012, as of Monday's close.
The shares lost a large portion of those gains, tumbling 10.3% to $41.74 at the close in New York, wiping more than $1bn from CNH's stock market value.