Caterpillar To Trucking Industry: “We May Miss Our Q1 Results”
For many years now, Caterpillar Inc. has been one of the world’s leading manufacturers of mining and construction equipment, industrial turbines, natural gas and diesel engines, and diesel-electric steam.
Not only that, Caterpillar also provides its expert financial services through its Caterpillar Financial Services center to all those companies in the trucking business looking for advice. The company claims that its customers can be found virtually in every corner of the planet and this is what makes them successful in the market.
Recently, Caterpillar reported that its first quarter results won’t comply with what Wall Street had anticipated for it. The reason: it’s still struggling with weak product demand.
According to the Thursday’s premarket trading, shares for fell by 2%. Caterpillar expects its Q1 adjusted profits to be somewhere between 65-75 cents per share on a revenue of $9.3 billion to $9.4 billion.
On $10.34 billion revenue, the profits expected by analysts that were also reported in the FactSet accounted for 95 cents/share.
But Caterpillar seems to be fine with it. In fact, the company was reported saying that it was “comfortable” with how the figures rolled out. However, the Illinois-based company still expects revenue of $40 to $44 billion and profits of $3.50 per share. But Wall Street experts predicted revenues of about $41.09 billion and a profit of $3.73 per share, which the company can still pull off.
Caterpillar’s officials report that the reason they have been experiencing a decline in demand for mining equipment is because of the decline in mineral pricing worldwide. As a result, the company, in the beginning of this year, had to shut down five of its facilities in Illinois, which resulted in the loss of about 670 jobs.
Although many opposed the idea in the first place, Caterpillar believes that this move is part of their big cost-cutting campaign it announced last year. A loss of 670 jobs is just a beginning, warned the company, and could further lead to a loss of 10,000 jobs in the coming three years as the company’s original cost-cutting plan predicts.
Caterpillar instability was quite visible an hour before the stock market was even open when its stocks were down by 2.5% from $1.82 to $72.50.