In a further indication of the stress rippling through the construction and mining sectors, Caterpillar reported its biggest decline in global machine sales since the end of 2016.
The report underlines how the coronavirus outbreak is putting a drag on the industries that Caterpillar supplies. Fears about the coronavirus impact on global growth have helped send shares of the economic bellwether down 38 per cent this year, off to its worst start since 2009.
The downbeat mood in the industry permeated ConExpo, the largest construction convention in North America. In remarks at the Las Vegas gathering this week, Caterpillar chief executive Jim Umpleby said the coronavirus hasn’t yet caused major supply snags and the company was focusing on executing the plan set in place when he first took over as the top executive.
But Mr Umpleby did not offer much detail on how the worldwide move to stamp out the virus will change prospects for the business.
“Our guidance was based on the best information that we had at the time and if we have any changes to that we will do it when we put out our first-quarter results,” Mr Umpleby said.
In February, Caterpillar said its machine sales dropped 11 per cent on a rolling three-month period. Isolating the Asia-Pacific region, the sales fell 17 per cent, the largest drop in four years.
Oil and gas retail sales fell 3 per cent, marking a sixth straight month of declines in the segment. Chief financial officer Andrew Bonfield said that oil-market tumult from the past week will impact the oil and gas business, but said that it’s still too early to tell how strong that may be.
Earlier in January, Caterpillar predicted full-year earnings below analysts' expectations as it struggles with sluggish global industrial activity.
The world's biggest construction and mining equipment maker said it expects 2020 profit of $8.50 (Dh31.2) per share to $10 per share, compared with the average analyst estimate of $10.63 per share.
The Illinois-based company has also been hit hard as its customers held off on big purchases due to uncertainty sparked by a prolonged US-China trade war.
