Caterpillar is out with its second-quarter earnings report, and results were mixed — but still concerning around the company’s mining prospects.
From Bloomberg …
Mining companies have cut billions of dollars of capital spending amid surplus commodities production and a drop in prices for coal, iron ore and other metals. Caterpillar, which completed a string of mining-related acquisitions when the market was stronger, said today the industry remains “weak” and order levels are still low.
“We are seeing our customers defer maintenance,” Chief Executive Officer Doug Oberhelman said on a conference call discussing a decline in mining equipment sales. “The bottom is just behind us. Our numbers are minuscule in terms of ticking up, but they are ticking up.”
Caterpillar’s sales of mining machinery through dealers dropped 38 percent in the second quarter, with declines in every region except North America.
The “mining slump is the No. 1 headwind for Caterpillar,” Matt Arnold, a St. Louis-based analyst with Edward Jones, said by phone. “It won’t last forever, but the question is, how well can the company harness improvement in its other segments in the meantime?”