Caterpillar whiffs on earnings and slashes its forecast for the year
The industrial-machinery maker posted $0.67 in adjusted earnings per share (EPS), and revenues of $9.5 billion.
According to Bloomberg, analysts had estimated that Caterpillar earned $0.68 in EPS, roughly the midpoint of the range it earlier projected, and revenues of $9.39 billion.
The company warned in March that its sales and earnings would drop amid low commodity prices, weak demand and the strong dollar. Its estimates for sales and profits trailed analysts' forecasts at the time.
Caterpillar CEO Doug Oberhelman said in the earnings statement that sales dropped substantially in oil and gas, mining and rail.
He noted the recent improvement in commodity prices and in construction-equipment sales in China, but other parts of the business remain challenged. And that's why the company has lowered its forecast for 2016 profits.
Caterpillar cut the midpoint of its forecast for full-year adjusted EPS. It now projects $3.70, down from $4, but higher than the consensus estimate for $3.61.
Caterpillar also expects to spend more on restructuring this year, with a new forecast of $550 million, up from $150 million.
Caterpillar shares fell by as much as 3.4% in pre-market trading.
On Thursday, the company reported another set of ugly 3-month rolling sales data, showing that the commodities crash is still taking its toll.
Because Caterpillar's products are used for expensive capital projects worldwide, it is often used as a bellwether of the manufacturing and global economy.