Caterpillar Inc. (NYSE:CAT) continues to suffer in the global commodities bust. Sales of construction, mining and oil equipment remain weak. Caterpillar is currently the world’s largest maker of mining and construction equipment, including bulldozers, trucks and other heavy machines, so it is feeling the effects more than most in the industry.
Caterpillar Chairman and Chief Executive Officer Doug Oberhelman said in a prepared statement, “Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged.” Construction activity and equipment sales in North America fell short of predictions. Continued uncertainty in Europe in the wake of the U.K.’s Brexit vote has also weighed on the construction industry.
Overall for the third quarter, Caterpillar reported a profit of $283 million, or 48 cents a share, down from $559 million, or 94 cents a share, a year earlier. Excluding restructuring costs, earnings per share fell to 85 cents from $1.05 a year ago. Caterpillar reported revenue plunging 16 percent, to $9.2 billion, when compared to the prior year.
The company now expects to make about $39 billion in sales for all of 2016. The company previously predicted $40 billion to $40.5 billion in revenue for 2016. The newly estimated results would make 2016 the company’s fourth-straight fiscal year of declining revenue. That forecast doesn’t include the looming adjustment.
The company is now predicting that 2017 will be as rough as this year. Mr. Oberhelman said in the statement, “We remain cautious as we look ahead to 2017, but are hopeful as the year unfolds we will begin to see more positive momentum.” Caterpillar is in the midst of a restructuring that will close or consolidate 20 plants by the end of 2018. The company shrunk its workforce to 97,100 full-time employees in the third quarter, down from 100,000 three months ago. A year ago, the company had 108,900 full-time employees.
Last week, Caterpillar announced Mr. Oberhelman would step down and incoming CEO Jim Umpleby would take over Jan. 1. Dave Calhoun, an executive at a New York private-equity firm, will be Caterpillar’s next chairman when Mr. Oberhelman steps down from that role at the end of March.