You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

breaking news

Honda supplier to add 85 jobs, invest $55M in Springfield plant

Caterpillar 2Q profit falls 43 percent; cuts outlook


Associated Press

Second-quarter earnings at Caterpillar fell 43 percent as dealers cut inventories more than the company expected. The world’s largest maker of construction and mining equipment cut its profit and revenue outlook for the year.

Caterpillar reported earnings of $960 million, or $1.45 per share, compared with $1.7 billion, or $2.54 per share a year ago. Revenue slid 15.8 percent to $14.63 billion.

That’s well short of Wall Street’s expectations. Analysts surveyed by FactSet had expected a profit of $1.69 per share on revenue of $15.09 billion.

The Peoria, Ill., company, which operates a large parts distribution center in Clayton, said dealers cut inventories by $1 billion as the global mining industry slowed due to reduced growth in China.

Shares of Caterpillar Inc. fell $2.40, or 2.8 percent, to $83.12 in morning trading.

Caterpillar also said it had currency translation and hedging losses during the quarter.

CEO Doug Oberhelman predicted improved profits during the second half of the year as the company takes further cost-cutting measures.

Caterpillar still cut its full-year profit outlook from about $7 per share to $6.50. And revenue is now expected to come in between $56 billion and $58 billion, down from previous guidance of $57 billion to $61 billion.

Dealers, Oberhelman said, used inventory from Caterpillar’s product distribution during the quarter rather than stocking their own businesses. Company inventory also dropped by $1.2 billion.

“With the sharp reduction in dealer inventory and the decline in mining, 2013 is turning out to be a tough year,” Oberhelman said in a statement.

Dealers are positioned to cut inventory even further, and the company expects it to fall by $1.5 billion to $2 billion in the second half, Oberhelman said.

“That means we are underselling end-user demand this year, and it sets us up for better sales in 2014,” he said.

He said the company already has temporarily closed factories and had rolling layoffs. “We’ve taken significant action already, and we will be taking additional cost reduction measures in the second half of 2013,” he said.

Caterpillar cut its global full-time work force by more than 10,000 people compared with the second quarter of last year. The company had 122,402 employees at the end of June. The temporary work force also dropped by 9,633 during the quarter.

Profits fell in each of Caterpillar’s big divisions. Operating profit fell 61 percent to $550 million in resource industries, which includes mining. It was down 47 percent to $362 million for construction equipment, and down 3 percent to $955 million in power systems, which makes items including large electrical generators and locomotive engines.

The company also said it repurchased $1 billion worth of stock in the second quarter, and based on strong cash flow, it expects to buy another $1 billion worth in the third quarter.


Reader Comments ...


Next Up in Business

Honda supplier to add 85 jobs, invest $55M in Springfield plant
Honda supplier to add 85 jobs, invest $55M in Springfield plant

A Japanese auto parts manufacturer will invest $55 million and add 85 jobs at the Champion City Business Park in Springfield, a significant expansion of its original plans for the site. Topre America first announced in December it would invest $10 million and add 20 jobs to build a Springfield plant to manufacture high-strength steel parts for the...
Five things to know: Are you at risk for a cyber attack?
Five things to know: Are you at risk for a cyber attack?

If you’re online, you’re at risk, experts say. “The fact of the matter is we as a society do more and more and more stuff online — that’s individuals, that’s governments, that’s businesses — and when you do that … what we call the threat surface has grown exponentially,” said David Salisbury...
Harambe fans rejoice: Charity to host gorilla-themed run in Cincinnati
Harambe fans rejoice: Charity to host gorilla-themed run in Cincinnati

A pack of gorillas will take over downtown Cincinnati next month, but they haven’t escaped from the Cincinnati Zoo. The Gorilla Glue Company will host its annual Cincinnati Gorilla Run, a 5k that raises funds and awareness for mountain gorillas. The race is on April 2, starting at the Montgomery Inn Boathouse at 925 Riverside Drive. Race participants...
Ohio adds 15K jobs in February
Ohio adds 15K jobs in February

Ohio employers posted a net gain of 15,200 jobs last month — the second-highest statewide increase in the nation — while the February unemployment rate edged up to 5.1 percent from 5 percent in January, the Ohio Department of Job and Family Services (ODJFS) reported today. The state jobs department also reported a significant revision to...
Easter consumers to spend $2.6B on Peeps and other candy
Easter consumers to spend $2.6B on Peeps and other candy

Americans will spend more than ever before on Easter festivities. Spending for the holiday is expected to reach $18.4 billion, an increase of 6 percent compared to last year’s record $17.3 billion. Consumers will spend an average of $152 per person, an increase of 4 percent from 2016. The data was collected by the National Retail Federation&rsquo...
More Stories