NEW YORK -- Industrial heavyweight Caterpillar (IW 500/21) Monday reported a big drop in quarterly earnings and profit forecast, citing a weakening outlook in its mining business.
Caterpillar said net income came in at $880 million, down 45.4% from the year-ago period. Revenues also fell sharply, dropping 17.3% to $13.2 billion.
Caterpillar usually adds inventory in the first quarter, as in 2012, when it added about $2 billion. But this year the company trimmed inventory by about a half billion dollars.
"What's happening in our business and in the economy overall is a mixed picture," said chief executive Doug Oberhelman. "Conditions in the world economy seem relatively stable, and we continue to expect slow growth in 2013."
Caterpillar said the range for 2013 revenues would be $57-$61 billion, down from the previous range of $60-$68 billion. The company said profits would come in at around $7.00 per share, down from the previous forecast of $7-$9 per share.
Caterpillar said its outlook for two of its three business segments -- construction industries and power systems -- is similar to the previous outlook. But conditions in the mining division "have decreased significantly."
The revised outlook now sees a sales decline of about 50% from 2012 for traditional Cat machines used in mining. Caterpillar's revenues in resources, which includes mining, came in at $3.7 billion in the most recent quarter, down from $4.8 billion in the year-earlier period.
"From an operational standpoint, we have taken action to align production, costs and capital expenditures with the sales and revenues outlook. While 2013 will be a challenging year, we are confident about the long-term," said Oberhelman.
Caterpillar said it would take advantage of its depressed stock price to undertake stock repurchases for the first time since 2008. The company will resume stock repurchases in the second quarter and expects repurchases of about $1 billion.
Copyright Agence France-Presse, 2013