By Utkarsh Shetti and Abhijith Ganapavaram

(Reuters) -Caterpillar on Wednesday trimmed its annual revenue forecast again on weakness in Europe and Asia/Pacific and lower equipment stocking by independent dealers in North America after another quarter of declining sales.

Shares of the company, considered a proxy for global economic activity, fell 2.1%. It also warned gains from price hikes implemented to offset high production costs were tapering off.

The downbeat projections follow the boost from post-pandemic demand and U.S. President Joe Biden's 2021 infrastructure law, a $1 trillion enactment aimed at upgrading roads, bridges and related infrastructure.

In recent quarters, however, demand was squeezed by customers facing higher borrowing costs, an uncertain economic outlook and a property market slump in China, stoking concerns about the view for 2025.

"With volume slowing quarter-over-quarter, our experts caution that Caterpillar could be facing a cyclical downturn in demand that will last through 2025," Third Bridge analyst Ryan Keeney said.

Equipment sales in Europe, the Middle East and Africa region decreased 6% amid a manufacturing downturn, while in the Asia/Pacific region they fell 7% on economic weakness, Caterpillar said.

Company executives, who declined to offer forecasts for 2025, said the China market remains weak for above 10-ton excavators and that they are yet to see any impact so far from the government's stimulus measures.

North America dealers ordered less equipment to rent out during the September quarter, even as revenue from such operations rose, executives said, adding the trend is expected to persist in the current quarter.

Still, executives sounded positive on long-term demand prospects, highlighting unspent funds in Biden's infrastructure law.

Wednesday's cut was the second this year. The company now expects 2024 revenue to be "slightly lower" year-over-year, from the "slightly lesser" projected in August.

Caterpillar, which does not provide forecast numbers, had in April said it expected revenue to be "broadly similar" to 2023.

Adjusted profit fell to $5.17 per share in the third quarter, missing the average analyst estimate of $5.34, according to data compiled by LSEG.

"Expectations were fairly muted coming into the quarter, but the magnitude of the miss and an increase in dealer inventories were both worse than expected," Citi analyst Kyle Menges said.

Total sales dropped 4% to $16.11 billion, the third consecutive quarter of year-on-year decline.

(Reporting by Utkarsh Shetti in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)