The largest maker in the world of mining and construction equipment, Caterpillar Inc. has forecasted that sales growth during 2013 would slow down and be less than in the last three years, as a deceleration of the global economy takes place.
The company said that its profit for 2012 would be between $9.00 and $9.25 per share based on revenue of close to $66 billion. That is compared to a forecast in July for earnings of $9.60 per share on S68 billion in sales.
Sales in 2013 would be between 5% less to 5% more that results of 2012, said company officials. That is compared with a projection of a 5.1% increase from analysts. Sales grew 31% over 2010, by 41% in 2011 and had been estimated to grow 13% during 2012.
One analyst said the big concern was that backlog was declining and would imply a more difficult year going forward, especially in the mining sector. In addition, it remains uncertain if the construction sector in the U.S. will reaccelerate or stay stagnant.
Caterpillar has always been very sensitive to economic fluctuations and because of the global economy softening, the company has received fewer orders. The backlog order dropped by 18% compared to the previous quarter. Production throughout much of company was reduced with some temporary shutdowns due to excess inventory.
Doug Oberhelman the CEO and Chairman of Caterpillar invested in factories for the company and has announced over $10 billion in acquisitions since July 2010 when he became CEO. However, his plans for expansion face hurdles because of the debt crisis in Europe and the deceleration of economic growth in emerging markets from Brazil to China.