MARKETS

Tough times continue for Cat

THINGS are still pretty tough at US mining equipment maker Caterpillar with the company expecting...

Noel Dyson
Tough times continue for Cat

Sales and revenues and profit per share are also down year on year. Sales and revenues were $10.3 billion for the quarter, down from the $12.3 billion in the second quarter of 2015. Profit per share was US93c a share, down from the $1.31 Cat reported in the second quarter of 2015.

The company had expected to have $US550 ($A730) million restructuring costs for the year. However, additional workforce reductions are expected in the second half of 2016 and that is expected to push the restructuring costs out to $700 million.

Sales and revenues for 2016 are expected to be $40 billion to $40.5 billion – the lower end of the $40-$42 billion outlook Cat provided in its first quarter financial results.

The profit per share outlook is also to be on the lower side. Cat had expected a profit per share for the full year in the range of $3 to $3.70 a share. Now it is looking at $2.75-$3.55 per share at the mid-range of its revised sales and revenue expectation.

On a sectoral basis, Caterpillar’s Resources Industries business reported a $163 million operating loss for the quarter. It had posted a slim $27 million profit a year earlier. Lower sales volumes were to blame.

“Despite a solid second quarter we’re cautious as we enter the second half of the year,” Caterpillar chairman and CEO Doug Oberhelman.

“We’re not expecting an upturn in important industries like mining, oil and gas and rail to happen this year.

“We’re continuing significant restructuring plans, which are designed to bring our cost structure more in line with demand while maintaining our capability to quickly serve our customers when our business recovers.

“Once it does recover, we expect substantial incremental profit improvement, realising the benefits of the tough actions we’re implementing now coupled with our ongoing investments in products and digital capabilities.”

Oberhelman said Caterpillar’s workers were delivering better performance on everything from quality, safety and position to market position.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production