Caterpillar on Thursday posted third-quarter revenue and profits that were below analysts’ estimates and reduced its outlook for full-year 2015, citing an “extremely challenging” environment.
The construction and mining giant’s earnings, excluding restructuring costs, fell 56% to $0.75 per share, while revenue dipped 19% to $11 billion. Analysts had predicted earnings of $0.78 and revenue of $11.25 billion.
“The environment remains extremely challenging for most of the key industries we serve,” Caterpillar CEO Doug Oberhelman said in a news release, adding that the company was focusing on improving “how we operate … [amid] the continued weakness in mining and oil and gas.”
Caterpillar also cut its full-year 2015 earnings per share to $3.70 from $4.70 previously. Excluding restructuring costs, it reduced its forecast to $4.60 from $5.00. Sales for the full year are expected to be down 5% on 2015.
The preliminary outlook, Caterpillar said, reflects weak economic growth in the United States and Europe, the slowdown in China, recession in Brazil, and continuing weakness in commodity prices.
“We’re confident in the long-term success of the industries we’re in and, together with our customers, we’ll weather today’s challenging market conditions,” Oberhelman said.
In September, Caterpillar shares fell about 7% after it announced a massive restructuring that would result in at least 10,000 layoffs and warned that its sales outlook had weakened. On Thursday, the stock was up more than 2%, at $70.57, suggesting investors were relieved that the third-quarter results were largely consistent with that warning.
“The results were in line with the pre-announcement and not worse,” Longbow Research analyst Eli Lustgarten told Reuters.
The company said its construction business was hit by weak economies in the Asia/Pacific region and the former Soviet Union as well as political unrest and low oil prices in the Middle East. Weakness in Latin America was pronounced in Brazil, where third-quarter construction equipment sales fell 60%.