Caterpillar Inc. (NYSE:CAT) reported a 43.5 percent drop in quarterly profit and cut its outlook for the year as a weakened mining industry had reduced demand for its heavy equipment.
The world’s largest construction equipment producer reported second-quarter earnings of $960 million, or $1.45 per share, down from $1.70 billion, or $2.54 per share, during this period last year. Analysts had predicted earnings of $1.70 per share.
The company’s sales fell 16 percent to $14.62 billion.
The lackluster results were piggybacked by a $1.2 billion decline in inventories, which chairman and CEO Doug Oberhelman said would continue to fall and was “significantly negative to profit.”
Caterpillar made a push in recent years into the mining equipment business, hoping that China’s seeming insatiability for resources would keep the industry thriving. But China’s recent slowdown has left the company struggling with weak demand.
The construction giant has already had to lay off hundreds of workers at its mining equipment plants.