NEW YORK CITY: US heavy equipment maker Caterpillar reported Thursday a steep drop in second-quarter profit and lowered its full-year sales forecast, citing the sluggish global economy and a stronger dollar.
Caterpillar said profit fell to $710 million in the April-June quarter, down 29 percent from $999 million in the first quarter.
Adjusted earnings tumbled 26 percent to $1.16 per share. Excluding restructuring costs, earnings per share at $1.27 were in line with market expectations.
Sales fell 13 percent to $12.3 billion for the maker of equipment for the construction, mining and oil sectors, considered a bellwether of the global economy. That missed analysts’ consensus estimate of $12.6 billion.
Caterpillar lowered its 2015 sales forecast to $49 billion from the January estimate of $50 billion, but kept unchanged its adjusted profit per share outlook of $5.00, excluding restructuring costs.
“Currency impacts from a stronger US dollar are causing sales in many countries to translate into fewer dollars than we initially expected,” said Doug Oberhelman, Caterpillar chairman and chief executive, in a statement.
Oberhelman described economic conditions in the United States as “modestly positive” but said the global economy remained “relatively stagnant”, with prices for commodities like oil, coal and iron ore looking unlikely to improve any time soon.
“Continuing economic weakness in China and Brazil, as well as uncertainty in the eurozone and over Greece, haven’t helped confidence,” he added.
“We are committed to controlling costs as we manage through this downturn,” he said.
Shares in Dow member Caterpillar dived three percent to $77.40 in pre-market trade.