Caterpillar cuts global revenue forecast, sees weak 2013

Caterpillar is hard at work lowering expectations.
Caterpillar is hard at work lowering expectations.
Image: AP Photo / PR Newswire
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Machinery manufacturer Caterpillar (CAT) slashed expectations for 2013 today, saying its outlook on economic conditions around the world has weakened substantially. It now plans to bring in $66 billion for 2012, as opposed to the $68 billion to $70 billion it had previously forecast. The company is widely regarded as a bellwether for construction growth around the world.

Caterpillar reported revenues of $16.45 billion in the third quarter, up 5% from the same quarter last year but below analyst expectations for $16.77 billion. This resulted in earnings per share of $2.54.

“As we’ve moved through the year, we’ve seen continued economic weakening and uncertainty. It’s definitely impacting our business with dealers intending to lower inventories and mining customers delaying some projects and reducing orders,” Caterpillar chairman and CEO Doug Oberhelman said. It says that global uncertainties have been reflected in lower demand for machinery, and that it has had to close plants and lay off workers, at least temporarily, to keep profits up.

Caterpillar believes this weakness should carry over at least through the first half of next year. It expects Europe to remain a drag on the global economy into 2013, but predicts that the US and Chinese economies should perform slightly better than they did this year. The company believes that this will result in approximately the same revenues and sales figures it saw this quarter.

Read the company’s full earnings release.