Caterpillar Inc. today lowered its 2016 outlook in a “challenged environment,” with third-quarter sales and revenue dropping 16 percent to $9.2 billion from $11 billion in the quarter last year.
Caterpillar reported a third-quarter profit of $283 million, or 48 cents a share, down from a revised $559 million, or 94 cents a share, a year earlier. Excluding restructuring costs, profit per share was 85 cents, down from $1.05 last year.
“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged,” Caterpillar chairman and CEO Doug Oberhelman said in a statement.
In North America the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks, he said.
The full-year outlook for 2016 sales and revenue is about $39 billion, and the forecast for profits is $2.35 a share, or $3.25 a share, excluding restructuring costs.
The previous outlook expected sales and revenue to be in a range of $40 billion to $40.5 billion, with profit at the midpoint of the sales-and-revenue range of about $2.75 a share, or about $3.55 a share, excluding restructuring costs.
Restructuring costs this year, which were expected to be about $700 million, are now forecast to be about $800 million, primarily because of asset writedowns recognized in the third quarter.
Oberhelman recently announced plans to retire as CEO after 41 years at Caterpillar. Jim Umpleby will succeed him.
“He’s been a key part of the leadership team for several years and is absolutely ready to lead Caterpillar,” Oberhelman said. “I’m confident I’m turning over a company that’s ready for a better future. We have a great team, our product portfolio is the best ever, our machine market position and quality remain at high levels and we’ve significantly improved our cost structure.”