Photo by: Henry Lazenby
VANCOUVER (miningweekly.com) – The world’s largest earthmoving and mining equipment manufacturer Caterpillar has booked a sharply lower third-quarter profit, citing global economic weakness and an abundance of used equipment available, which is slowing sales.
The NYSE-listed company expressed concern that the tough market would persist through much of 2017, prompting it to lower its full-year revenue outlook for the second time this year. It now expects revenues of about $39-billion, down from the range of $40-billion to $40.5-billion.
“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged. In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks,” Caterpillar chairperson and CEO Doug Oberhelman stated.
Caterpillar has had a slight increase in aftermarket equipment part sales in recent months, but not enough to call it a sales recovery, the company stated on Tuesday.
The group posted a third-quarter profit of $283-million, or $0.48 a share, down from a revised $559-million, or $0.94 a share, a year earlier.
Excluding restructuring costs, earnings per share came to $0.85, beating analyst estimates of $0.76 convincingly.
Revenue fell to $9.2-billion from about $11-billion, while analysts had expected $9.8-billion.
Caterpillar forecast 2016 profit at $2.35 a share, or $3.25 excluding restructuring costs.
The company also raised the forecast for 2016 restructuring costs to $800-million, from a previous estimate of $700-million.
Caterpillar shares closed down 1.76% at $84.48 apiece on Tuesday.