Caterpillar’s quarterly profits shrink as mining business slows

   April 22, 2013 8:20 am

 

GE Transportation’s chief competitor – Caterpillar – earlier today reported a rough first quarter and lowered its expectations for full-year sales and profits because its mining business is slowing. Sales of Caterpillar-branded mining machines will drop by half this year, the company said.
Caterpillar said mining customers placed big orders for gear last year, just as mining profits fell, so now those customers are cutting back. Dealers who would normally be stocking up on Caterpillar gear to get ready for a busy summer instead cut inventory during the first quarter.
Caterpillar has already started cutting costs. On April 5 it said it would lay off more than 460 employees at a mining truck plant in Decatur, Ill. Caterpillar also announced mining-related layoffs in Milwaukee and plans to cut 1,300 of 3,400 jobs at a plant near Brussels that makes excavators, loading vehicles, and engine parts.
Net income dropped to $882 million, or $1.31 per share. Revenue fell 17 percent to $13.21 billion, from $15.98 billion a year ago. Both missed analyst expectations.

 

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