Cat Resource Industries announce 4Q15 loss

Caterpillar Resource Industries – which includes its mining equipment business – lost US$105 million in 4Q15 on the back of falling sales of both its new equipment and aftermarket parts. Sales were 23% down to US$1.84 billion compared to US$2.39 billion in 4Q15.

“Commodity prices remained weak and mining customers continued to focus on improving productivity in existing mines and reducing their total capital expenditures,” the company said in its 4Q15 earnings release. “As a result, sales and new orders in Resource Industries continue to be weak.”

Overall the company announced a 4Q15 loss of US$114 million compared with an operating profit of US$1.1 billion in 4Q14 on a further fall in sales and revenues. Sales and revenues totalled US$11 billion in 4Q15 compared to US$14.24 billion in 4Q14.

For the full year, sales and revenues were US$47 billion – US$3 billion under its own forecast, 15% lower than in 2014 and 29% lower then the 2012 peak. Profit for the year was US$2.1 billion down from US$3.7 billion in 2014.

“We anticipated about US$5 billion of the US$8 billion sales and revenues decline in our January 2015 outlook as we started the year,” said Caterpillar CEO, Doug Oberhelman. “Actual sales and revenues were about US$3 billion below that US$50 billion outlook because of steeper than expected declines in oil prices, a stronger US dollar, weaker construction equipment sales and lower than expected mining-related sales in Resource Industries.”

Caterpillar also said it didn’t expect things to improve in 2016 either with sales and revenues forecast to be in the range of US$40 – US$44 billion. Sales in Resources Industries are expected to fall again some 15 – 20% compared to 2015 on the back of continued weak commodity prices and resulting difficult financial conditions for Caterpillar’s mining customers.

Global workforce fell to about 105 700 at the end of 2015 compared with about 114 200 at the end of 2014.

Edited by Jonathan Rowland.

Read the article online at: https://www.worldcoal.com/mining/01022016/cat-resource-industries-announce-4q15-loss-2016-141/