Construction giant Caterpillar doesn’t see much good happening in the global economy right now.
“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged,” Caterpillar CEO Doug Oberhelman said in the company’s third-quarter earnings release Tuesday.
“In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks.”
In the third quarter, Caterpillar reported earnings of $0.85 per share, excluding restructuring costs, on revenue of $9.2 billion. Revenues were down 16% from the same quarter last year. Wall Street had been looking for earnings per share of $0.76 on revenue of $9.87 billion, according to estimates from Yahoo Finance.
Caterpillar’s results are closely-tracked by investors and strategists as the company is viewed as a bellwether of global construction and manufacturing activity.
In pre-market trading, shares of the company were down about 2%. Year-to-date, the stock is up about 25%.
For the full-year 2016, Caterpillar expects to record revenues of around $39 billion and earnings per share of $3.25, excluding restructuring costs. Both are shy of current Street estimates.
The third quarter marks the eighth-straight quarter Caterpillar’s revenue declined on a year-over-year basis. Caterpillar’s revenue growth rate hasn’t topped 1% year-on-year since the third quarter of 2012.
The company expects 2017 revenues “will not be significantly different” than 2016, adding that risks for the year are largely weighted to the negative side. That is, the company expects if anything changes, it will be for the worse.
“While we are seeing early signals of improvement in some areas, we continue to face a number of challenge,” Olberhelman said.
“We remain cautious as we look ahead to 2017, but are hopeful as the year unfolds we will begin to see more positive momentum. Whether or not that happens, we are continuing to prepare for a better future.”
Myles Udland is a writer at Yahoo Finance.
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