Caterpillar Sales Slide

Caterpillar Inc. on Thursday reported a steeper-than-expected 13% drop in sales as it continues to struggle with falling sales of equipment related to oil and gas exploration and weakness in mining.

The Peoria, Ill.-based company also dropped its sales outlook for the year by $1 billion to $49 billion. It backed its profit forecast of $4.70 a share.

Shares fell 2.2% in premarket trading.

Caterpillar, the world's largest maker of construction and mining machinery, has been facing a persistent slump in mining equipment, sluggishness in construction machinery in much of the world and a more recent slowdown in its most profitable business, engines used for such things as generating electricity, pushing gas through pipelines, running industrial machines and powering trains and ships.

For the quarter ended June, profit fell to $710 million, or $1.16 a share, from $999 million, or $1.57 a share, a year earlier. Excluding restructuring charges, per-share profit fell to $1.27 a share from $1.69 a share a year earlier.

Sales fell to $12.32 billion from $14.15 billion.

Analysts polled by Thomson Reuters had forecast earnings of $1.27 a share on revenue of $12.62 billion.

Caterpillar's construction-industry sales fell 18% to $4.44 billion in the quarter, while resource industries sales fell 11% to $1.99 billion. Energy and transportation equipment sales were down 12% to $4.54 billion.

Caterpillar's order backlog at the end of the second quarter was $14.8 billion, down $1.7 billion from the first quarter of the year.

Write to Chelsey Dulaney at [e-mail]

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