Industrial giant Caterpillar reported a big drop in third-quarter profits on October 22 and projected lower sales in 2016 due to weakness in the energy and mining sectors. Earnings for the quarter ending September 30 came in at $368 million, down 63.8 percent compared with the year-ago period. Revenues tumbled 19.1 percent to $11.0 billion.
"The environment remains extremely challenging for most of the key industries we serve," said Caterpillar chief executive Doug Oberhelman. "Improving how we operate is our focus amidst the continued weakness in mining and oil and gas."
Caterpillar, which manufacturers equipment for the construction, energy, resources and other industries, reported revenue declines in all three of its business divisions.
Caterpillar announced a major cost-cutting program last month that could shutter more than 20 facilities and eliminate more than 10,000 jobs.
"Managing through cyclicality has been critical to Caterpillar's success for the past 90 years," Oberhelman said. "We're confident in the long-term success of the industries we're in, and together with our customers, we'll weather today's challenging market conditions."
Caterpillar's preliminary 2016 outlook projects sales at about five percent below those in 2015, with energy and resources down and construction at flat to down five percent.
The outlook reflects weak growth in the US and Europe, a slowing China, recession in Brazil and continuing weakness in commodity prices, the company said.
Caterpillar's results translated into 75 cents per share, excluding restructuring costs. Analysts expected the company to report 78 cents per share.
Shares of Caterpillar slumped 4.1 percent to $66.83 in pre-market trade.
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