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Caterpillar’s (NYSE:CAT) third-quarter figures are even lower than analysts were expecting: $13.423 billion in revenue – an 18% drop from Q2 2012 – and $946 million in profit.
Analysts were predicting $14.35 billion in revenue and $1.11 billion in profit.
The company’s share price lost 6.19% as profit per share came in at $1.45 – a drop of more than $1 compared with last year’s Q3.
Caterpillar also provided a preliminary sales and revenues outlook for 2014. Recognizing significant risks and uncertainties, the firm is looking at flat numbers over the next year – plus or minus 5% of 2013 levels.
“We’re not seeing bright spots in mining yet, but the turnaround will happen at some point, and when it does, we’ll be ready to respond,” CEO Doug Oberhelman noted in a news release.
Hit by decreasing sales in every region except North America, the mining equipment giant has revised its 2013 outlook and now expects sales and revenues from between $56 and $58 billion to about $55 billion.
“This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year,” Oberhelman said.” That is a 17 percent decline from 2012, with about 75 percent of the drop from Resource Industries, which is principally mining. We expect Resource Industries to be down close to 40 percent for the full year and Power Systems’ and Construction Industries’ sales to each be down about 5 percent.”
In order to deal with the mining downturn, Caterpillar has reduced costs to the tune of 13,000 jobs worldwide. It’s also implemented “reductions in program spending, substantially lowered incentive pay, lower capital expenditures and implementation of general austerity measures across the company.”
The company also blames a mining industry that’s difficult to predict. After a downturn in mid-2012, Caterpillar expected an improvement in sales.
“Unfortunately, order rates have not picked up much despite continuing strong commodity production,” Oberhelman said.
Despite the downturn, Caterpillar has enjoyed a 6% rise in its share price over the past six months and is currently trading at a three-month high of $83.87 per share.
