Caterpillar reported sales and revenues were $14.6 billion, down 16% from $17.4 billion in the second quarter of 2012. Profit was $960 million in the second quarter of 2013, down over 43% from $1.7 billion in the second quarter of 2012.

In a separate report on retail sales of machines that is based on dealer statistics, Caterpillar said that world-wide retail machinery sales were down 8% for the three-month rolling period in June compared to the same period in 2012. North American retail sales were down 10% in June on the same basis, which followed a 16% decline for the period ended in May.

Chairman and CEO Doug Oberhelman said, “A $1 billion reduction in dealer machine inventory was more than we previously expected and was negative to our sales and profit in the quarter. While dealer machine inventory is low by historic standards, dealers are utilizing inventory from our product distribution centers and are positioned to reduce inventory even further. As a result, we expect dealer machine inventory to decline about $1.5 to $2 billion in the second half of 2013 and end the year about $3.5 billion lower than year-end 2012. That means that we are underselling end-user demand this year, and it sets us up for better sales in 2014.”

Oberhelman added, “With the sharp reduction in dealer inventory and the decline in mining, 2013 is turning out to be a tough year and we’ve already taken action to reduce costs. During the first half of the year, we’ve had temporary factory shutdowns, rolling layoffs throughout much of the company, reductions in our flexible workforce, and we’ve reduced discretionary and program costs. While we’ve taken significant action already, we will be taking additional cost reduction measures in the second half of 2013.”

In his 2013 outlook, Oberhelman said, “We have revised our outlook for 2013 to reflect sales and revenues in a range of $56 to $58 billion, with profit per share of about $6.50 at the middle of the sales and revenues outlook range. The previous outlook for 2013 sales and revenues was a range of $57 to $61 billion, with profit per share of about $7.00 at the middle of the sales and revenues outlook range.

Oberhelman added, “Overall end-user demand is similar to our previous outlook, but we now expect a more significant reduction in dealer machine inventory. That’s the main reason for the reduction in the sales and revenues outlook. During the second quarter, dealers increased their utilization of inventory from our product distribution centers, which allows them to meet customer demand with less inventory.”

Caterpillar worldwide full-time employment was 122,402 at the end of the second quarter of 2013, compared with 132,825 at the end of the second quarter of 2012, a decrease of 10,423 full-time employees. The flexible workforce decreased 9,633 for a total decrease in the global workforce of 20,056.

To read the full Caterpillar news release click here.