Caterpillar lowered its full-year outlook in its third-quarter earnings report today and said 2016 expectations for sales and revenue are expected to drop another 5 percent for a fourth consecutive year of decline.
Sales and revenue for the quarter that ended Sept. 30 totaled 11 billion, down from 13.5 billion in the quarter last year. The company reported a profit of $368 million, or 62 cents a share, compared with $1.02 billion, or $1.63 a share, a year earlier.
Caterpillar revised its full-year 2015 sales and revenue outlook down from about $49 billion to a top end of about $48 billion and its earnings-per-share forecast from $4.70 to $3.70.
The company said it expects about $1.5 billion of annual cost reduction by 2018. About $750 million of that is expected next year.
“Given current industry weakness, we have sufficient, and in some cases too much capacity,” CEO Doug Oberhelman said in the report. “That said, our factories are modern, working on lean and are well positioned to handle more volume with cyclical recovery when it comes.”
Caterpillar expects CAPEX this year and in 2016 to be less than half of what it was in 2012. It has already implemented substantial restructuring. Ten percent of its total production square footage has been consolidated or closed.
The company’s workforce has declined by more than 35,000 from its peak in 2012.