(Minews) - Caterpillar, the world's biggest mining and construction equipment provider, is bracing for a year similar to 2013, when sales to mining companies plunged as miners struggled with weak commodity prices.
The company sees "some signs of improvement in the global economy," which should help its construction and power systems segments, but expects sales and revenues to be similar to 2013 as sales to the resource industry decline modestly.
"We expect sales of mining equipment will remain weak in 2014 and our outlook reflects a sales decline of about 10 percent in Resource Industries," Caterpillar said in its end of year results.
The company expects profit per share of $5.85 this year – not including restructing costs – compared with $5.75 and $8.48 in 2012. Restructuring costs could affect this by about 55 cents per share.
Caterpillar also said it will repurchase about $1.7 billion of stock during the first quarter of 2014 and an additional $10 billion over the next four years – "a result of our record cash flow, the strength of our balance sheet and our confidence in the long-term future of Caterpillar," the company noted.
This will complete a $7.5 billion repurchase originally approved in 2007. The new $10 billion authorization will expire in December 2018. The announcement bumped the firm\'s share price by nearly 6% to trade at $91.29 per share.
Looking back at 2013, Caterpillar says the year "turned out to be worse than we anticipated."
Sales and revenue were $55.7 billion for the year, down 16% from 2012, driven by a drop in sales of new mining machines. But the company beat analysts\' expectations: According to the AP, a FactSet survey put the equipment maker"s Q3 2013 profit at $1.27 per share. Caterpillar actually reported $1.54. At $56 billion in sales forecasted for 2014, the company\'s anticipates a slightly better year than 13 estimates compiled by Bloomberg.
CEO Doug Oberhelman said cost flexibility was critical this past year to maintaining profitability. The cost-cutting measures included several rounds of lay-off, affecting nearly 10,000 workers.
"Cost flexibility is critical to our strategy and was a significant focus in 2013 as we took substantial actions to help maintain profitability as sales declined," Oberhelman said. "It wasn’t easy, especially for our employees who endured an incredibly tough year, but the actions we initiated helped us deliver strong operational performance in 2013.”
منبع: Mining.com
