Caterpillar sees soft sales in 1Q16

Caterpillar has announced 1Q16 sales and revenues forecasts of US$9.3 – US$9.4 billion on the back of its continued weakness in its equipment sales and down from US$12.7 billion in 1Q15. Analysts had expected 1Q16 revenue of US$10.3 billion.

The company expects sales of its mining equipment to fall another 15 – 20% over the course of this year, Mike DeWalt, Vice President of Finance Services at Caterpillar told the Bank of America Merrill Lynch Industrials Conference, bringing down its mining revenue to around US$7 billion this year from a peak of around US$20 billion in 2012.

As an example of the weakness in the sector, DeWalt noted that sales of its large mining trucks – one of Caterpillar’s most important mining products – had fallen from a peak of about 1600 in 2012 to 150 this year.

Construction equipment sales are expected to fall about 5 – 10% and sales from its Energy & Transportation business are forecast to be down 10 – 15%.

In its three-month rolling retain sales statistics filing, the company reported sales from its Resource Industries business down in all geographical regions with Asia Pacific particularly hard hit – down 56% in February 2016 and 55% in January 2016.

However, DeWalt was keen to stress that the first quarter is usually a weaker selling period for the company and the revised guidance “is reasonably consistent with the normal seasonal selling pattern”.

The company kept its full-year guidance at US$40 – US$44 billion with DeWalt telling investors that Caterpillar was looking at sales and revenue at the mid-point of that range.

Edited by Jonathan Rowland.

Read the article online at: https://www.worldcoal.com/mining/22032016/caterpillar-sees-soft-sales-in-1q16-2016-442/