Caterpillar profit misses, cuts outlook on weak mining sales
CHICAGO (Reuters) - Caterpillar Inc posted disappointing quarterly results and cut its 2013 profit forecast on Monday to reflect a drop in demand for heavy equipment from its mining customers.
But its shares gained nearly 1 percent to $81.21 in early New York Stock Exchange trading, helped by bullish comments from Chairman and Chief Executive Officer Doug Oberhelman that the mining sector has hit bottom and production was expected to ramp up in the second quarter, based on lower inventories in China and the United States.
The Peoria, Illinois-based company said it now expects to report a 2013 profit of $7 per share on sales of $57 billion to $61 billion. That was down from a previously estimated profit of between $7 and $9 a share on sales of $60 billion to $68 billion.
"Mining is the big culprit," said Longbow Research analyst Eli Lustgarten. "The key question now is not 2013, but 2014 - will it be up or down?"
The news came as the company, the world's largest maker of construction and mining equipment, reported a weaker-than-expected first-quarter profit.
Caterpillar said it earned a profit of $880 million, or $1.31 a share, down from $1.59 billion, or $2.37 a share, in the year-ago quarter.
Analysts had expected the company to report a profit of $1.40 per share. Sales during the period fell 17 percent to $13.20 billion.
Caterpillar also said on Monday that it would resume a share buyback for the first time in five years.
CEO Oberhelman said the revised 2013 outlook reflects a sales decline of about 50 percent from 2012 for traditional Cat machines used in mining. Continued...