Poor sales hurt Caterpillar profit

Analysts expect a fall in demand for mining equipment to hurt Caterpillar's upcoming profit and revenue guidance figures.

In a note to investors on Friday JP Morgan said a cut in profit forecast was “widely anticipated” following a report last week that showed sales from Caterpillar dealers had dipped 11 per cent on the same time last year.

 

The report showed global sales for the three months to March were down in every region except Latin America, and the fall hit hardest in the Asia-Pacific, where sales plunged 24 per cent.

 

Weakness in Australia, Indonesia, and China was blamed for leading the fall in demand.

 

Like Caterpillar, rival equipment provider Komatsu has also lowered its profit and sales forecast for the quarter, with weakness in the Asia-Pacific also hurting the Japanese company.

 

The slowdown in the mining sector has also hurt smaller equipment companies like Ausdrill, which recently posted a 15 per cent profit downgrade for the year to June 30.

 

In announcing the downgrade Ausdrill said economic conditions were tough and there was a surplus of mining equipment in the market.

 

Last week Australia's largest equipment hire company, Coates Hire, also blamed poor conditions for its move to cut 75 jobs.

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