Caterpillar posts lower results, cuts outlook on mining weakness
Caterpillar posted a lower-than-expected quarterly profit on Wednesday and cut its full-year forecast yet again as weak demand from mining customers continued to bedevil the heavy equipment maker.
The Peoria, Illinois-based company also provided its first forecast for 2014 sales, saying it expects revenue next year to be essentially flat to up or down 5 percent compared with 2013.
Caterpillar, the world's largest maker of earth-moving equipment, reported a third-quarter profit of $946 million, or $1.45 a share, down from $1.7 billion, or $2.54 a share, a year earlier.
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Analysts on average expected earnings of $1.66 a share, according to Thomson Reuters I/B/E/S.
Total sales and revenue fell 18 percent to $13.4 billion.
Mining equipment is Caterpillar's most profitable product category, but sales have been hurt in recent quarters because miners, facing investor backlash over unpopular takeovers, budget overruns and falling metals prices, have slashed capital spending, slowed development on some projects and shelved others entirely.
Caterpillar said on Wednesday that "unfortunately, order rates have not picked up much," despite a recent rise in commodity production.
In response, Caterpillar said it had temporarily shuttered some plants, furloughed thousands of salaried and management employees, and reduced its full-time workforce by 3,000 workers during the third quarter. Over the past year, the company has cut 13,000 jobs - about 10 percent of the global total.
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With no uptick in orders expected, Caterpillar said it now expects a full-year 2013 profit of $5.50 a share on sales of about $55 billion, down from an earlier forecast of $6.50 a share on sales of $56 billion to $58 billion.
The revised sales outlook is nearly $11 billion lower than what Caterpillar posted last year.
After the earnings announcement, the company's shares fell in pre-market trade. (Click here to get the latest quote.)