Sharp fall in Caterpillar’s third quarter results
By Helen Wright23 October 2013
Equipment manufacturer Caterpillar has lowered its full-year outlook and issued a flat forecast for 2014 after reporting a strong decline in revenues and profit for the third quarter.
Revenues totalled US$ 13.4 billion for the three months to the end of September, down -19% from US$ 16.5 billion for the same period in 2012, while operating profit almost halved to US$ 1.4 billion from US$ 2.6 billion a year ago.
Revenues in Caterpillar’s construction industries division totalled US$ 4.55 billion for the third quarter, down -7% year-on-year, while operating profit was US$ 262 million, compared with US$ 459 million for the same three months in 2012.
Caterpillar said sales of new construction equipment had declined, while revenues from aftermarket parts were flat. The manufacturer blamed the decline in sales volume on changes in dealer inventories.
Nevertheless, Caterpillar chairman and CEO Doug Oberhelman said the company’s mining division had weighed the most on the results.
“This year has proven to be difficult, with expected sales and revenues nearly US$ 11 billion lower than last year. That is a -17% decline from 2012, with about 75% of the drop from resource industries, which is principally mining.
“We expect resource industries to be down close to -40% for the full year and power systems and construction industries sales each to be down about -5%.”
Indeed, Caterpillar revised its 2013 outlook and now expects sales and revenues to be about US$ 55 billion, with profit per share of about US$ 5.50. This compares to its previous outlook of full-year sales totalling between US$ 56 billion and US$ 58 billion, with profit per share of around US$ 6.50.
Looking ahead to 2014, Caterpillar forecast flat sales and revenues within a +/- 5% range. The company said it expected revenue growth in its construction industries to be offset by relatively flat sales in power systems and a decline in resource industries.