Caterpillar announced third-quarter sales and revenues of $13.4 billion, down 18% from $16.4 billion in the third quarter of 2012. Consolidated Q3/13 operating profit of $1.4 billion was down from $2.6 billion or 46% from Q3/12.

Resource Industries, which includes mining equipment, sales and revenues in Q3/13, were $3.0 billion, down 42% from $5.2 billion a year earlier. Construction Industries sales and revenues in Q3/13 were $5.44 billion, down about 7% from $4.90 billion in Q3/12.

The company said it revised its 2013 outlook and now expects sales and revenues to be about $55 billion. The previous outlook for 2013 sales and revenues was a range of $56 to $58 billion.

“This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year. That is a 17% decline from 2012, with about 75% of the drop from Resource Industries, which is principally mining. We expect Resource Industries to be down close to 40% for the full year and Power Systems’ and Construction Industries’ sales to each be down about 5%,” said Caterpillar chairman and CEO Doug Oberhelman.

Not only is mining down from 2012, the demand for equipment has been difficult to forecast. Orders for new mining equipment began to drop significantly in mid-2012 and have continued at very low levels. As a result of weak orders and feedback from end users, the sales and revenues outlook provided in January of 2013 included a decline in mining sales.

At that time, based on strong mine production for many commodities, the company’s outlook expected that order rates would improve later in 2013.
“Unfortunately, order rates have not picked up much despite continuing strong commodity production. That has caused us to ratchet down our sales and revenues outlook as we have moved through 2013,” Oberhelman said.

Caterpillar said it has taken substantial actions and is mitigating some of the impact of lower mining sales on profit. The company expects to limit the decline in 2013 operating profit from 2012 to about 30 percent of the sales and revenues change. This is at the high end of the company’s incremental operating profit pull through target range and is a result of unfavorable product mix as the sales decline is weighted toward higher margin mining products.

To read the entire Caterpillar news release, click here.