Caterpillar Inc. posted third-quarter net income of $946
million, down 44.3 percent from nearly $1.7 billion in the same
period last year on sales that dipped 18.4 percent to $13.42
The Peoria, Ill.-based
heavy equipment manufacturer said it now expects sales to total
$55 billion this year compared with a previous forecast of $56
billion to $58 billion.
"This year has proven
to be difficult, with expected sales and revenues nearly $11
billion lower than last year. That is a 17-percent decline from
2012, with about 75 percent of the drop from (the) Resource
Industries (division), which is principally mining,"
Caterpillar chairman and chief executive officer Douglas R.
Oberhelman said during a conference call Oct. 23. "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.
He said that not only
is mining down year to date, but demand for equipment has been
difficult to forecast.
Orders for new mining
equipment began to drop significantly in mid-2012 and have
continued at very low levels, Oberhelman said. "Unfortunately,
order rates have not picked up much despite continuing strong
cut costs by lowering production and laying off workers
beginning in the second half of 2012, including at its South
Milwaukee, Wis., plant, which makes mining equipment (
amm.com, Oct. 3).
measures have included many temporary plant shutdowns, a
headcount reduction of more than 13,000 people globally
throughout the past year, temporary layoffs for thousands of
salaried and management employees, lower program spending,
lower incentive pay, lower capital expenditures and
implementation of general austerity measures across the
costs about $700 million and reduced capital expenditures by
about $400 million" year to date, Oberhelman said.
better economic growth worldwide next year but said the
direction of U.S. fiscal and monetary policy remains uncertain,
eurozone economies are far from healthy and China continues to
transition to a more consumer-demand-led economy.
"There are encouraging
signs, but there is also a good deal of uncertainty. Were
not seeing bright spots in mining yet, but the turnaround will
happen ... and when it does, well be ready to respond,"