The coronavirus crisis is sapping demand for Caterpillar Inc.’s giant machinery from builders and miners around the world.
Caterpillar said Friday that its revenue in the U.S. dropped more than 40% in the second quarter, and that demand from final customers fell around 22%. The company said it expects a similar decline for its third quarter.
“With the uncertainty out there with the economic environment, they are delaying making capital expenditures,” Andrew Bonfield, Caterpillar’s financial chief, said in an interview.
The company’s shares fell 3.6% to $131.81.
Caterpillar said it was well-positioned to weather the crisis, with $8.8 billion of cash and $18.5 billion of available liquidity at the end of its second quarter.
Revenue fell globally across Caterpillar’s three segments: Sales dropped 37% in construction, 35% in mining and 24% in its energy and transportation business.
Caterpillar, which makes sales through a network of independent dealers, said volumes fell $3.9 billion during the quarter, reflecting about a $2 billion reduction in final-user demand and a $1.9 billion hit to dealer inventories. Caterpillar said machinery sales to dealers dropped by nearly one-third globally.
While the company said some road-building customers reported faster construction times because of much lower road traffic, demand from them was more than offset by other customers delaying projects. The company also saw lower parts sales in some of its divisions and saw less services-related revenue, an indicator that customers were using their equipment less.
The company said it cut costs, including by using less temporary, contract labor at some of its facilities. The company’s financial arm had set aside $515 million for credit losses, compared with $457 million at the end of the first quarter. The company said more customers were past due on their payments, even as it worked with them to extend terms and offer temporary relief.
“Customers were in pretty good financial health when they came into the crisis,” Mr. Bonfield said.
In all, revenue declined 31%, falling to $10 billion, from $14.4 billion in the same quarter a year before. Profit declined 72% to $458 million, dropping to 84 cents a share from $2.83 in the same quarter a year before.
The company declined to provide guidance for the year, citing the uncertainty around the pandemic and the economy.
“It’s very much a fluid, dynamic situation,” Chief Executive Jim Umpleby told investors. “The virus starts to go away in an area, then can come back.”
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