Caterpillar Inc. (CAT), the biggest maker of construction and mining equipment, reported a steepening decline in retail machine sales in Asia as miners continue to reduce spending.
Dealer sales in the Asia-Pacific region fell 30 percent in the three months through May compared with the same period a year earlier, the Peoria, Illinois-based company said today in a filing. Sales slid 25 percent in the three months through April.
Caterpillar dealers’ global sales slid 12 percent in three months through May, after falling 13 percent in the period through April.
“We believe global numbers will need to show some improvement shortly in order to support the positive move in Caterpillar’s stock year-to-date,” Stephen Volkmann, a New York-based analyst at Jefferies Group LLC who has a hold rating on the shares, said in a report.
There was also bad news for construction machinery in Caterpillar’s latest dealer sales report. For that segment, Asia-Pacific sales were down 8 percent, compared with the 2 percent increase in the three months through April. Construction sales slowed in Latin America and were flat in North America. In Africa, Europe and the Middle East they fell at a slower pace.
Mining companies have slashed spending in the face of lower commodity prices. Caterpillar said in April that large mining-truck sales in the first quarter were down about 80 percent from their 2012 peak. The company has fired workers and shut factories after sales and earnings dropped last year, the first time they’ve declined since 2009.
For Caterpillar’s resource industries segment, the company said today that dealer sales fell 69 percent in the Asia-Pacific region and 47 percent in Africa, Europe and the Middle East in the most recent period. Sales dropped 62 percent in Latin America and were up 7 percent in North America.
The shares dropped 0.2 percent to $107.25 in New York. They have gained 18 percent so far in 2014.
(An earlier version of this story was corrected to say factories instead of mines.)
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