Caterpillar misses on earnings, slashes outlook

The Peoria-based firm also lower its earnings outlook for this year and sharply increased its estimates on restructuring costs for 2015.

“The environment remains extremely challenging for most of the key industries we serve,” the company’s chairman and CEO, Doug Oberhelman, said in a statement. “Improving how we operate is our focus amidst the continued weakness in mining and oil and gas,” he added.

As a global supplier of construction and mining equipment, Caterpillar is considered a reliable bellwether of economic activity. So when it posts poor results, gloominess spreads.

And that was the case today, when it logged third quarter figures. CAT posted adjusted earnings of 75 cents per share, down from $1.72 in the year-earlier period. Revenue fell to $10.96 billion from $13.55 billion a year ago.

The company has been aggressively cutting cost following a slowdown in mining that has hit in sales for the last three years.

Weathering the storm

Oberhelman said the firm is doing everything it can to remain strong, including amassing $6 billion in cash on his balance sheet. “We’ve got a strong balance sheet that will allow us to weather this storm we’re in. And it’s a pretty good one now.”

Sales in the resource sector fell 17% in the quarter, while it dropped 15% in the construction industry. Energy and transportation equipment sales fell 25%.

As a consequence, the equipment giant slashed its profit outlook for the year, since profit tumbled 64% in the third quarter amid weak demand for its heavy equipment and restructuring charges.

Caterpillar said it is now expecting profit of about $4.60 a share excluding restructuring costs. It had previously forecast an adjusted profit of $5.