Profits were up significantly for Caterpillar in the fourth quarter of 2013, and the company on Monday issued a positive earnings forecast for the new year … but there wasn’t a lot of positivity in the sector South Milwaukeeans watch closest.
Here is MarketWatch coverage. From it:
Oberhelman said the company sees some signs of improvement in the global economy, which should bode well for sales in its construction and power systems businesses. However, despite expectations that mining production will continue to rise, the company sees mining companies further reducing capital spending this year.
“As a result, we’re expecting sales in resource industries to decline modestly,” he said. “ We’ve already taken a number of restructuring actions to help improve our financial results and expect to take additional actions in 2014.”
Reduced spending by mining companies has taken a toll on sales of mining equipment, while Caterpillar’s sales of construction equipment have benefited from a recovery of home building in the U.S. The heavy-equipment maker has been closing plants that make mining equipment and laying off workers to reflect a sharp drop in demand in the sector.
Of course, I always worry about the “additional actions in 2014.” The Reuters story included this …
He characterized the moves as “tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound.”
I guess we’ll have to wait and see what “tough decisions” are to come. Let’s pray the worst is over.