Caterpillar lowered its outlook for 2013 after reporting a drop in third-quarter sales and profits from the same period last year.
The company said today that sales and revenues for the quarter that ended Sept. 30 were $13.4 billion, down from $16.4 billion in the quarter last year.
Profit for the quarter was $946 million, or $1.45 a diluted share, down from $1.7 billion, or $2.54 a share, for the 2012 quarter.
Caterpillar now expects sales and revenues for the year to be about $55 billion, with a profit per share of about $5.50. The previous full-year outlook for sales and revenues was a range of $56 billion to $58 billion, with a profit per share of about $6.50 at the middle of that range.
"This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year,” Caterpillar chairman and CEO Doug Oberhelman said in a statement. “That is a 17 percent decline from 2012, with about 75 percent of the drop from resource industries, which is principally mining. We expect resource industries to be down close to 40 percent for the full year and power systems' and construction industries' sales to each be down about 5 percent.”
The magnitude of the sales decline in sales in 2013 has resulted in substantial actions to lower production, costs and employment.
Actions already taken include many temporary plant shutdowns, a reduction of more than 13,000 in the company’s global work force in the past year, temporary layoffs for thousands of salaried and management employees, reductions in program spending, substantially lowered incentive pay, lower capital expenditures and the implementation of general austerity measures across the company.
The power systems segment has performed well, Oberhelman said. “It's our largest segment, with sales and profit that has been relatively stable in 2013.”
In the third quarter, Machinery and Power Systems’ operating cash flow was $2.1 billion, and the company is expecting 2013 to be the second-best year in its history for cash flow and not far from the all-time record.
"With $11 billion coming off the top line, it has been a painful year and has required wide-ranging and substantial actions across the company. … We've continued to improve our operational performance this year, and it's unfortunate that the improvements we've made have been far overshadowed by the sales decline in mining,” Oberhelman said.