UPDATE 3-CAT CEO sees sales rebound to $50 bln within 5 yrs

* Caterpillar CEO sees gradual rebound to '08 sales levels

* Warns rebound won't be smooth

* Stands by 2020 goals of $100 bln of annual sales

* Shares little changed after closing down 1.62 percent

(Recasts, adds details on 2020 goals, background.)

By James B. Kelleher

CHICAGO, June 10 (Reuters) - Caterpillar Inc's (CAT.N) chief executive offered little hope on Wednesday of a quick rebound in business at the construction and mining equipment maker, saying there was only a good chance its sales would return to last year's record levels by 2013.

Speaking at the company's annual shareholder meeting, Jim Owens also warned that progress toward that revenue goal "won't come smoothly" -- though he reiterated Caterpillar's longer-term goal of hitting $100 billion in annual sales by 2020.

Caterpillar, which reported its first quarterly loss in 17 years in the first quarter, has warned investors to expect sales of $31.5 billion to $38.5 billion in 2009, down from $51.3 billion in 2008 -- potentially the company's worst one-year revenue decline since the 1930s.

The culprit is the worldwide downturn, which has sent sales of the company's distinctive yellow machinery skidding along with commodity and oil prices and sharply curtailed residential and commercial construction.

During a question-and-answer session, Owens said he was "sensing we may be finding a bottom here." Even so, he said he thought there was only "an 80 percent chance some time in the next five years of going back above the $50 billion threshold" in sales.

As in previous years, the meeting drew critics protesting Caterpillar's sales to Israel, whose defense forces have used the company's equipment as part of its effort to put down the Palestinian uprising.

But the protesters did not disrupt the meeting as they have previous gatherings -- even after a resolution they supported failed to pass, which would have forced Caterpillar to publish a report on foreign military sales.

Caterpillar says such sales accounted for about $30 million in 2008, or about 0.06 percent of total revenue, and that it would be an inappropriate use of the company's resources to complete the requested report.

All seven shareholder proposals up for vote this year failed to garner enough support, including a push to split the position of chair and CEO and to elect directors annually.

Owens took the unusual step last week of writing to institutional investors as a group to explain the company's opposition to four of the seven items stockholders were voting on.

"Changing our governance practices and corporate structure, as contemplated by the stockholder proposals presented below, will only divert attention and resources," Owens wrote.

"While these types of proposals may have merit at some companies, for the reasons provided below, we strongly encourage you to afford Caterpillar the benefit of individual consideration."

Caterpillar, which has eliminated about 25,000 full-time and temporary positions over the past few months, posted a first-quarter loss of $112 million, or 19 cents a share, compared with a year-earlier profit of $922 million, or $1.45 a share.

Sales fell 22 percent to $9.2 billion.

The results also reflected $558 million of charges that resulted from the layoffs.

In a research note put out just as the shareholder meeting started, Joel Tiss, an analyst at the Buckingham Research Group, said that recent discussions with management led him to believe the second quarter was turning out to be even weaker than the first "as the global downturn becomes more synchronized.

"The company is hoping," Tiss wrote, "that 3Q flattens out with 2Q levels and that the U.S. will begin to recover moderately by year end." But he warned that "Cat does not see Europe and Japan getting any better before 2011, making a synchronized global recovery in 2010 look increasingly risky. It seems that many industrial stocks are pricing in a pretty strong rebound in 2010, and without many sources."

Caterpillar shares were little changed in after-hours trading after closing down 1.62 percent at $37.62. (Editing by Bernard Orr and Steve Orlofsky)