Ahead of earnings, Caterpillar dealer data paints mixed picture
(Reuters) - Caterpillar Inc (CAT.N: Quote) released unaudited dealer sales data on Wednesday that showed a deepening deterioration in global demand for its mining equipment but a continued, albeit modest, rebound in sales of construction equipment as well as reciprocating and turbine engines.
The numbers suggested the company's first-quarter earnings, due early Thursday, will be another mixed bag, unlikely to surprise investors on the upside.
The world's largest maker of construction and mining equipment said global dealer sales of its yellow earth-moving machines fell 12 percent year-over-year in March, after falling 8 percent in both January and February.
Equipment demand from mining customers was especially weak, Caterpillar said, with global dealer sales of those high-margin products tumbling 46 percent in March after falling 37 percent in both January and February.
That overshadowed a modest but continued recovery in global sales of machines to construction customers, which rose 9 percent year-over-year in March after growing at a similar rate in both January and February.
The downturn in demand for mining equipment was especially dramatic in the Asia-Pacific region, where dealer sales slumped 65 percent in March after falling 55 percent in February and 53 percent in January. South America was another region of pronounced weakness with mining equipment sales down 60 percent year-over-year in March after falling 49 percent in February and 36 percent in January.
The news was better on the engine side of Caterpillar's business. The company said global dealer sales of its gas turbines, diesel engines and generators rose 7 percent year-over-year in March after rising 2 percent in both January and February.
Double-digit increases in dealer sales of engines to industrial and power generation customers offset weakness in sales to customers in the transportation industry. Sales to oil and gas customers, which were down single-digits in January and February, stabilized in March and were unchanged year-over-year, the company said.
Caterpillar sells its equipment and engines through a worldwide network of nearly 180 independent dealers. So the unaudited dealer sales figures provide a useful, though incomplete, glimpse of the company's underlying business ahead of its official quarterly filings with the U.S. Securities and Exchange Commission. Continued...