Oct. 23 -Caterpillar cut its earnings forecast yet again as customers cut back on investments in new mines. Fred Katayama reports.
Caterpillar's in a hole. The world's largest construction equipment maker is getting slammed by spending cutbacks for mining equipment. With the equipment sales slowdown in Asia spilling over into Latin America, Caterpillar sees little change in its sales next year and slashed its earnings outlook yet again. Caterpillar says production is up at existing mines, but companies aren't investing in new ones as they look to cut costs. As a result, its profit fell 44 percent in the third quarter. Mining makes up a big chunk of Caterpillar's sales. It had beefed up its investment in this sector three years ago by buying Bucyrus. But orders for new mining equipment, which began falling in 2012, haven't improved as the company had earlier predicted. Other miners have announced spending cuts. CEO Doug Oberhelman said Caterpillar is doing better than its peers in most industries, including mining, and that its sales in China were strong. But the company's dour outlook hammered its stock at the market open. Caterpillar's shares, which have nearly tripled over the last five years, have been flat so far this year.