MINNEAPOLIS — A slowdown in the mining business is digging a hole in Caterpillar’s profits.
First-quarter profit shrank 45 percent. Caterpillar lowered its expectations for full year sales and profit because its mining business is slowing. Sales of Caterpillar-branded mining machines will drop by half this year, the company said Monday.
Caterpillar, based in Peoria, Ill., said mining customers placed big orders for equipment last year, just as mining profits fell, so now those customers are cutting back. Dealers who would normally be stocking up on Caterpillar gear to get ready for a busy summer instead cut inventory during the first quarter.
Caterpillar Logistics has a 1.6-million-square foot distribution center off Hoke Road in Clayton south of Interstate 70, employing some 600 people. The center has an annual payroll of some $12 million to $14 million, the company has said.
Caterpillar already has started cutting costs. On April 5 it said it would lay off more than 460 employees at a mining truck plant in Decatur, Ill. Caterpillar also announced mining-related layoffs in Milwaukee and plans to cut 1,300 of 3,400 jobs at a plant near Brussels that makes excavators, loading vehicles, and engine parts.
Caterpillar’s net income dropped to $882 million, or $1.31 per share. Revenue fell 17 percent to $13.21 billion, from $15.98 billion a year ago.
It also cut its 2013 guidance. Caterpillar now expects to earn $7 per share, down from $7 to $9 previously. It forecast revenue of $57 billion to $61 billion, down from $60 billion to $68 billion.
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