Caterpillar is expecting sales and revenues to come in at the lower end of its US$40 – US$42 million estimate, according to its latest quarterly results statement, as it warned for further job losses to come in the second half of the year.
Pointing to subdued economic growth and global uncertainty, particularly in Europe following the Brexit vote and coup attempt in Turkey, the company said it was now forecasting sales and revenues of between US$40 and US$40.5 billion – in line with the Thomson First Call analyst consensus.
The company also raised its forecast for restructuring costs from about US$500 million to about US$700 million on the back of additional workforce reductions expected in 2H16.
“We’re not expecting an upturn in important industries like mining, oil and gas and rail to happen this year,” said Caterpillar CEO, Doug Oberhelman.
“We’re continuing significant restructuring plans, which are designed to bring our cost structure more in line with demand, while maintaining our capability to quickly serve our customers when our business recovers.”
Total employment stood at 112 000 at of 2Q16, compared to 126 800 at the end of June 2015. The company announced a 16% fall in sales and revenues in 2Q16, while sales from its Resource Industries segment, which houses Caterpillar’s mining equipment business, fell by 29%.
Edited by Jonathan Rowland.
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