- Flickr/ Darron Birgenheier
Caterpillar lowered its outlook for profit this year when it reported third-quarter earnings results on Tuesday.
The retailer of large industrial equipment said it expected 2016 earnings per share excluding restructuring costs to be $3.25, down from an earlier projection of $3.55.
Because Caterpillar products like bulldozers and electric generators are used in a variety of massive capital projects across the world, the company’s performance is seen as a bellwether for the global industrial economy.
“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged,” CEO Doug Oberhelman said in the earnings statement.
“We remain cautious as we look ahead to 2017, but are hopeful as the year unfolds we will begin to see more positive momentum.”
Caterpillar said that in 2017 the balance of risk was “likely on the negative side” and that uncertainty around the UK’s vote to leave the European Union would continue.
The company’s preliminary forecast does not see 2017 sales and revenue that much different from that of 2016. A rebound in commodity prices and in the construction industries in key markets including China, Russia, and Brazil could boost Caterpillar in the coming year.
Profit excluding restructuring costs in the third quarter was $0.85 a share, beating the average analyst forecast of $0.76 according to Bloomberg. Equipment sales fell because of low demand in every region except the Asia/Pacific, where Chinese government spending on infrastructure provided a lift, Caterpillar said.
The company’s shares fell 2% in premarket trading after earnings.