{"id":1128626,"date":"2019-07-24T11:56:48","date_gmt":"2019-07-24T16:56:48","guid":{"rendered":"https:\/\/www.mining.com\/?p=997443"},"modified":"2019-07-24T11:56:48","modified_gmt":"2019-07-24T16:56:48","slug":"caterpillar-pours-cold-water-on-manufacturing-energy-sector-hopes","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1128626","title":{"rendered":"Caterpillar pours cold water on manufacturing, energy sector hopes"},"content":{"rendered":"<p>Caterpillar&nbsp;(NYSE: CAT), the world\u2019s no.1 heavy machinery maker, <a href=\"https:\/\/www.caterpillar.com\/content\/dam\/caterpillarDotCom\/releases\/2Q19%20Caterpillar%20Inc.%20Results.pdf\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">posted on Wednesday disappointing earnings<\/a> driven mainly by its construction division, the major contributor to earnings, in yet another sign of an ongoing slowdown in manufacturing and volatility in the energy sector.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The Deerfield, Illinois-based firm, whose large exposure to China makes it a proxy for the global impact of trade tensions, reported earnings of $1.62 billion, or $2.83 per share in the second quarter of the year. In 2018, it earned $1.71 billion, or $2.82 per share in the same period. <\/p>\n<p>Caterpillar attributed the results, which were well short of the $3.12 Wall Street analysts were expecting, to slower activity in China, which took a toll on construction&nbsp;equipment sales in Asia. <\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>Caterpillar&#8217;s large exposure to China makes it a proxy for the global impact of trade tensions.<\/p>\n<\/blockquote>\n<\/figure>\n<p>Latin America reported flat sales<br \/>\ndue to reduced construction activity, while Europe\u2019s sales drop was mainly<br \/>\nattributed to currency headwinds. <\/p>\n<p>Energy and transportation revenue fell<br \/>\nby 4%. The machinery maker blame the division\u2019s results on lower demand in the<br \/>\nPermian Basin. The largest US oil patch is experiencing a slowdown in fracking<br \/>\nactivity as drilling companies rein in spending.<\/p>\n<p>Its performance was also affected by a weakening energy sector. In the past three months, oil prices have dropped by about 14%, while natural gas is down more than 10%. Crude prices are down 17% over the past year, with natural gas is down almost 18%.<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-baclog-Q2-2019-1024x624.jpg\" alt=\"\" class=\"wp-image-997447\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-baclog-Q2-2019-1024x624.jpg 1024w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-baclog-Q2-2019-300x183.jpg 300w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-baclog-Q2-2019-768x468.jpg 768w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-baclog-Q2-2019.jpg 1296w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<p>Higher material costs and the<br \/>\nstrong US dollar also weighed on some business lines, the world\u2019s biggest<br \/>\nearthmoving equipment maker noted.<\/p>\n<p>Caterpillar still expects full-year earnings between $12.06 and $13.06 per share, but it anticipates being at the lower end of that range.&nbsp;<\/p>\n<p>\u201cBased on everything that we see we believe overall the market demand will be stable and we have mentioned the fact that we have some competitive pricing pressures from local competitors,\u201d chief executive Jim Umpleby said on the earnings call. <\/p>\n<p>\u201cWe are suddenly taking steps to ensure our competitiveness long-term in China. We\u2019re introducing a number of GC products that will help us compete as well but again, we feel good about our forecast there in China,\u201d he noted.<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-shares-on-Q2-2019-results-1024x624.jpg\" alt=\"\" class=\"wp-image-997448\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-shares-on-Q2-2019-results-1024x624.jpg 1024w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-shares-on-Q2-2019-results-300x183.jpg 300w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-shares-on-Q2-2019-results-768x468.jpg 768w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/07\/caterpillar-shares-on-Q2-2019-results.jpg 1296w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<p>The results from Caterpillar, which<br \/>\nis considered a reliable bellwether of global economic activity,&nbsp;come amid<br \/>\nsimmering trade tensions that partly triggered the International Monetary<br \/>\nFund\u2019s decision to cut global growth forecast earlier this week. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Caterpillar&nbsp;(NYSE: CAT), the world&rsquo;s no.1 heavy machinery maker, posted on Wednesday disappointing earnings driven mainly by its construction division, the major contributor 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