On Monday for a second time this year, Caterpillar Inc. (NYSE:CAT) cut its 2012 forecast for revenue and earnings, and cautioned the global economy was slowing down faster than it had anticipated.

The company’s executives said that its retail dealers are selling its inventories, as opposed to purchasing new new equipment, driving Caterpillar Inc. (NYSE:CAT) to abandon some of its production, reported CNBC.

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Caterpillar’s Chief Executive Doug Oberhelman said in a statement, “As we’ve moved through the year, we’ve seen continued economic weakening and uncertainty.” He added that it could take until 2013’s second half to see overall economic growth.

These comments came as the company reported its third quarter earnings on Monday morning before the bells. Its profit was better-than-expected, thanks to a jump in U.S. heavy equipment sales. Caterpillar Inc. (NYSE:CAT) is still facing challenges in Europe and some regions in Latin America.

Caterpillar Inc. (NYSE:CAT) executives addressed this in a CNBC interview, and said a declining euro zone is the “most significant” risk to the company’s 2013 outlook, but added that China seems “to be on the edge of something of a recovery”, but the region is tough for them.

But Oberhelman wasn’t all doom and gloom in the interview, and said:

“I don’t predict a recession anywhere in the world at all in 2013, but Europe is the one where there are so many political unknowns it’s hard to see how that’s going to end up. We sure see China past the bottom. I’m optimistic about China in 2013.”

In addition, the CEO voiced a “pragmatic view” for next year, and was confident that the U.S. could dodge going over the possible “fiscal cliff” that could include increasing tax rates with large spending cuts.

In perhaps a very honest statement, Oberhelman also spoke about the challenges of forecasting the future. He said:

“There are lots of things that are just unknown right now. Maybe in 30, 60, or 90 days, maybe that’ll start to clear up and we’ll know better. Right now that’s the best we can see in our crystal ball. Short term is actually a little tougher to forecast than the long-term.”

Oberhelman spoke about the U.S. housing market and sees a continuing rebound. He noted:

“The bubble that we went through is being worked off, [and] there’s no question in my mind that housing starts will inch up,” and return to their pre-2007 levels in the longer-term.

“It’s contingent on the unemployment rate, how many people are working, and when that’s solved we’ll see housing starts back over a million.

Caterpillar Inc. (NYSE:CAT) is currently trading up 1.40 percent and trading at $85.03.

There were also some interesting comments on the conference call.

Mike DeWalt – Caterpillar Inc. (NYSE:CAT)- Director, IR notes:

On the downside in construction, we are not expecting economic recovery in Europe, and are planning sales there to be lower. For our third large segment, Power Systems, we are expecting sales to be roughly flat with 2012.

Mike continued stating:

And even then for the full year, we are only expecting economic growth for the world of about 2.7% and that is just a couple of tenths of a point above what we are expecting for this year. In the developed world, we continue to expect growth at levels that are well below potential, at about 1.5% in total for the developed world, with about 2% growth in the US and the euro-zone close to zero. In the developing world, we are expecting growth of about 5.5%. That is about half a point better than 2012. We think Brazil will continue to improve some and that China’s growth rates will improve to about 8.5%.

Again, to summarize our view of the 2013 economic prospects, we are not expecting much change from this year. We are not planning for a significant pick-up in the world economy, but that said, we are also not expecting a recession. We are expecting a continuation of the slow growth path the world seems to be on. I will just repeat that for emphasis. We are not seeing, expecting, or reflecting the world being in recession in our outlook for 2013.