Caterpillar
Caterpillar construction machines sit parked at the Patten Cat dealership in Hammond, Ind., in this Oct. 20, 2006, file photo. REUTERS/Eric Vidal

Caterpillar Inc. (NYSE:CAT), the world's largest maker of mining and construction equipment, reported dismal third-quarter earnings Wednesday, underperforming already weak expectations and lowering its 2013 guidance.

The Peoria, Ill., company saw earnings per share of $1.45 for the quarter, down from a consensus expectation of $1.68. Sales were $13.4 billion, against expectations of about $14.3 billion, and down $16.4 billion compared to last year.

Profits fell 44 percent from the same quarter last year.

“The miss was across all segments,” wrote William Blair & Co. industrial analysts in a morning update on Wednesday. “We believe shares will trade lower today as the Street digests new forecasts and valuation becomes a constraint. … The near-term upside is limited.”

Company CEO Doug Oberhelman blamed Caterpillar’s mining sector, which dragged revenues down by 17 percent from last year. Orders for mining equipment have been difficult to predict in 2013, with a more positive outlook from the company earlier in the year now dashed to pieces. Mining companies spend less on capital projects in a weak metals market and that has played a major role. Sales by Caterpillar dealers in Asia-Pacific fell 30 percent in the quarter ended Aug. 31.

“With $11 billion coming off the top line, it has been a painful year and has required wide-ranging and substantial actions across the company,” he said in a statement.

The losses come even as Caterpillar has focused heavily on cost-cutting, firing 13,000 people worldwide this year and shutting down plants temporarily, for a total of $1.1 billion in savings so far.

“Dealer destocking continues with an $800 million cut in the third quarter, in line with expectations, and another large reduction expected in the fourth quarter,” wrote William Blair & Co. analysts.

The company said its outlook for sales and revenue in 2014 is flat compared to 2013, within a 5 percent plus or minus range. It revised its 2013 outlook down, from sales of maximum $58 billion, to $55 billion, with EPS down from $6.50 to $5.50.

Caterpillar is now betting on China, where it saw sales rise by a third in the latest quarter, and are overall higher for the year so far.

Industrial analysts have known for a while that the mining sector has suffered from weakness, but many expect end markets for industrial companies to pick up in 2014, after weakness in Europe and uncertainty in China this year, and a slow recovery in North America.

Commercial construction could also come back in 2014, boosting industrial equipment sales to builders.