(MENAFN- ProactiveInvestors) Caterpillar () the world's largest maker of construction and mining equipment provided a downbeat outlook for this year as falling oil and copper prices may reduce demand from drillers and miners. Shares tumbled.
Profit is anticipated to be $4.75 per share on revenue of $50 billion for the year the Peoria Illinois-based company said in a statement today. Analysts polled by Capital IQ had projected $6.67 a share in earnings on $55 billion in revenue.
The company which is a big supplier of engines to the oil and gas industry said tumbling oil copper and coal prices will weigh on its sales for the year.
Caterpillar has said the recent plummet in oil prices could put a chill on the oil industry hurting demand for Caterpillar engines used in oil exploration and production. Caterpillar said it also expects to sell less mining equipment as copper coal and iron ore prices fall.
Caterpillar said today that it expects economic growth to remain sluggish this year and the company will incur another $150 million in restructuring charges as it seeks to improve its cost structure.
"While we are without a doubt facing a tough year in 2015 we're driving cost management through additional restructuring actions and continued operational improvements gained from our focus on Lean Management” chief executive officer Doug Oberhelman said in the statement.
“While 2015 will be difficult the work we've done to improve our cost structure market position and quality will position us for better results when the world economy and the key industries we serve improve" Oberhelman added.
For the fourth quarter net profit fell 25 percent to $757 million from $1.03 billion a year earlier.
Earnings adjusted for restructuring costs came to $1.35 per share. The result fell short of Wall Street expectations. The average estimate of analysts was for earnings of $1.55 per share.
The construction equipment company which is best-known for its bright yellow trucks and diggers posted revenue of $14.24 billion in the period beating Street forecasts. Analysts expected $14.18 billion.
Retail machinery sales were down 12 percent in the quarter Caterpillar said.
Breaking it down by industry sales to the resource industry - largely mining companies - sank 22 percent. Construction was down 9 percent although there were small gains in North American and Europe Africa and the Middle East.
Caterpillar’s sales to energy and transportation customers - a segment that includes rail locomotives as well as oil companies - were up 22 percent.
Shares fell 8.6 percent to $86.03 at 8:19 a.m. in New York. The stock declined 6 percent since the beginning of the year through yesterday while the Standard & Poor's 500 index has stayed nearly flat.
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