Caterpillar cuts 2015 profit outlook as mining spending falls

Caterpillar Inc., the world’s biggest construction and mining equipment maker, cut its forecast for 2015 earnings after commodity producers reduced capital expenditure.

Caterpillar said profit will be $12 to $18 a share, compared with previous projections of $15 to $20. While a global recession remains possible, Caterpillar is forecasting moderate and “anemic” growth through 2015, Chairman and Chief Executive Officer Doug Oberhelman said yesterday in a presentation to analysts at the MINExpo industry conference in Las Vegas. Construction activity in emerging markets will probably show modest improvements, he said.

“We’ve seen a slowing in economic growth that was more than we expected,” he said. “We think ’13 could look like 2012 in terms of worldwide economic growth.”

Oberhelman has bet on a continuation of growth in commodity demand by buying mining-equipment maker Bucyrus International Inc. for $8.6 billion last year and agreeing in November to acquire ERA Mining Machinery Ltd. in China. His plans are coming under pressure as mining companies cut capital expenditures after economic expansion slowed in China, the world’s largest user of coal and metals.

Caterpillar fell 1.6 percent to $89.38 at 8:23 a.m. before the start of regular trading in New York, after dropping as much as 2.6 percent after the close yesterday.

‘More Reasonable’

The shares are little changed this year, while the Dow Jones Industrial Average, of which Caterpillar is a member, has advanced 11 percent.

The lowered forecasts for 2015 are “more reasonable,” Stephen Volkmann, an analyst at Jefferies & Co. in New York, said in a report.

Global mining capital expenditures will drop 14 percent through 2014 from a peak of $136 billion this year, JPMorgan Chase & Co. said in a Sept. 21 report. BHP Billiton Ltd., the world’s biggest mining company, last month delayed an estimated $68 billion of projects. Australian iron-ore producer Fortescue Metals Group Ltd. on Sept. 4 cut its full-year spending forecast by 26 percent to $4.6 billion.

Chinese excavator sales have fallen 36 percent this year, according to JPMorgan. Caterpillar said last month it shut its main Chinese excavator plant for much of July. The company said Sept. 21 that it’s planning to temporarily idle a component plant in Illinois for a week around Thanksgiving and a week around Christmas.

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