Caterpillar Inc (CAT.N) posted lower quarterly profits and cut its outlook, weakened by slower Chinese economic growth and Brazil’s recession, but shares rallied on relief that the report was largely consistent with last month’s warning and restructuring announcement.
“The results were in line with the pre-announcement and not worse,” said Longbow Research analyst Eli Lustgarten, commenting on the jump in shares, up 4.3 percent in midday trade.
The world’s largest construction and mining company cut its full-year 2015 earnings per share to $3.70 from $4.70 previously. Excluding restructuring costs, it cut its 2015 EPS forecast to $4.60 from $5.00.
“The environment remains extremely challenging for most of the key industries we serve, with sales and revenues down 19 percent from the third quarter last year,” said Caterpillar Chairman and Chief Executive Doug Oberhelman in a statement.
Caterpillar forecast a 5 percent fall in sales in 2016, which would be its fourth straight year of declines.
For the third quarter, it reported net income of $368 million, or 62 cents per share, down from $1.02 billion, or $1.63 per share a year earlier.
Earnings per share excluding restructuring costs were 75 cents, compared with $1.72 in the same quarter a year earlier. Analysts expected earnings of 78 cents a share.
Caterpillar’s third-quarter revenue of $11 billion fell from about $13.5 billion a year earlier. Analysts had expected $11.25 billion.
Amid weakness in the industry, the company said it had too much capacity and said its planned capital expenditure in 2016 would be less than half than 2012 levels.
The company saw 2015 full-year revenue of about $48 billion, down from $49 billion seen in September when it announced a large global restructuring that included 10,000 job cuts through 2018 and worldwide facility closures.
Analysts had estimated full-year 2015 revenue at $47.79 billion.
Restructuring costs were estimated to be $800 million in 2015, up from a previous forecast $250 million.
Regarding construction, the company said it was hit by weak economies in the Asia/Pacific region and the former Soviet Union as well as political unrest and low oil prices in the Middle East.
Weakness in Latin America was pronounced in Brazil, where construction equipment sales fell 60 percent below that of 2014. It saw the country’s recession continuing into 2016.
The post Caterpillar Cuts 2015 Profit Outlook & Sees 2016 Sales Drop appeared first on Trunews..
from Trunews. http://ift.tt/1jWA0n4
via IFTTT
No comments:
Post a Comment