Workers walk past Caterpillar excavator machines at a factory in GosseliesThomson Reuters
(Reuters) – Caterpillar Inc said on Monday that its global retail sales declined 12 percent for the three months ended May as a long global slowdown in the construction and mining sectors continued to weigh on the heavy equipment maker’s core markets.
The report marks 42 consecutive months of declining sales for Caterpillar. However, Eli Lustgarten, an analyst at Longbow Research, said the pace of decline for the Peoria, Illinois-based manufacturer appears to be decelerating, a possible sign of stabilization.
For the three-month period ending February sales fell 21 percent compared to a year ago, but declines have been less steep since then. Every month the company releases dealer’s three-month rolling sales compared with the same period of the prior year.
Caterpillar, known for its iconic yellow earth-moving equipment, said global machine sales were down 12 percent in May, 12 percent in April and 13 percent in March.
“The pace of Caterpillar’s overall decline has been remarkably steady with low double digit declines for over 2 years now,” Jefferies’ analyst Stephan Volkmann wrote in a research note.
Overall, the company’s machinery sales have declined since the peak in 2012 due to the global slowdown in both mining and construction. At the end of 2015, full year global sales were down almost $20 billion from nearly $65.9 billion in 2012.
Caterpillar will report 2016 second-quarter results on July 26 and analysts on average expect earnings per share to be 97 cents on $10 billion in revenue. The company posted revenues of $12.3 billion in the second quarter of 2015.
As of April, the company’s outlook for full year 2016 earnings per share is at $3.70, excluding restructuring costs, with $40 billion to $42 billion in revenues.
“In most industrial markets we are running along the bottom at this point,” Lustgarten said. “But the problem is we are not seeing anything that suggests improvement.”
As the outlook from the first quarter reflects, Caterpillar is expecting a fourth down year of sales and revenues, a company spokesperson said on Monday.
(Reporting By Meredith Davis; Editing by Bernard Orr)
Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.
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