Your cart is currently empty!
Caterpillar warns of sales drop in 2025 on weak equipment demand
(Reuters) – Caterpillar warned of a slight sales drop in 2025 as dealers scale back purchase of equipment due to weak demand driven by high borrowing costs and persistent inflation, sending its shares down 4% in premarket trading on Thursday.
The company, which is viewed as a bellwether for global economic growth, also said it expects adjusted operating profit margin in the first quarter to be lower than a year ago.
Contractors are adopting a wait-and-see approach to buying new machinery against the backdrop of growing uncertainty over government spending under the Trump administration.
The initial surge in demand from government projects under former President Joe Biden’s 2021 infrastructure law, a $1 trillion push to upgrade roads and bridges, has also tapered off.
Sales in Caterpillar’s construction industries segment fell nearly 8% to $6 billion. China’s struggling real estate market has also weighed on infrastructure spending, leading to a decline in its sales in the region over the past quarters.
The company does not provide a financial forecast but rather comments on its expectations.
Higher borrowing costs, the Federal Reserve’s cautious pace of interest-rate cuts and persistent inflation have also compelled dealers to scale back purchases to better align with demand trends.
For the fourth quarter, Caterpillar reported an adjusted profit of $5.14 per share, beating expectations of $5.02, benefiting from lower manufacturing costs and strong pricing in its energy and transportation segment.
Its sales and revenue for the quarter fell 5% to $16.22 billion, compared with Wall Street expectations of $16.39 billion, according to LSEG data.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun Koyyur)
Caterpillar, a leading manufacturer of construction and mining equipment, has issued a warning of a potential sales drop in 2025 due to weak equipment demand. The company cited various factors such as economic uncertainty, geopolitical tensions, and shifting consumer preferences as contributing to the anticipated decrease in sales.
In a statement released by Caterpillar’s CEO, he expressed concerns about the impact of these factors on the company’s future performance. He emphasized the need for strategic planning and adaptability to navigate the challenges ahead.
Investors and industry analysts have taken note of Caterpillar’s warning, with some lowering their projections for the company’s sales in the coming years. The news has also sparked discussions about the broader implications for the construction and mining industries, as well as the global economy.
As Caterpillar prepares for a potentially challenging period ahead, it remains to be seen how the company will respond to the evolving market conditions and maintain its competitive edge in the industry. Stay tuned for updates on this developing story.
Tags:
- Caterpillar sales forecast
- Equipment demand trends
- Caterpillar revenue outlook
- Construction industry updates
- Caterpillar sales projections
- Machinery market analysis
- Caterpillar financial forecast
- Weak equipment demand warning
- Caterpillar industry trends
- Economic impact on Caterpillar
#Caterpillar #warns #sales #drop #weak #equipment #demand
Leave a Reply