Caterpillar Q1 earnings plunge 46 pct amid COVID-19

Xinhua News,CHICAGO
2020-04-29 00:53

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CHICAGO, April 28 (Xinhua) -- Caterpillar Inc. on Tuesday said its first-quarter earnings plunged 46 percent while sales tumbled in China and other parts of its global operations as economic shutdowns caused by the COVID-19 pandemic hammered results.

The world's largest construction and mining equipment maker said adjusted earnings per share in the latest quarter were 1.6 U.S. dollars, down from 3.25 dollars in the same period a year ago. Revenue dropped 21 percent to 10.6 billion dollars, from 13.5 billion dollars a year earlier.

Caterpillar did not provide a 2020 financial outlook, citing the continued global economic uncertainty caused by the outbreak.

Latest-quarter sales in the company's construction industries' segment dropped 27 percent to 4.31 billion dollars, compared with 5.87 billion dollars a year earlier. Sales declined in Asia/Pacific due to lower end-user demand across most of the region, primarily in China, the company said.

Lower demand in China was mostly due to COVID-19 pandemic-related impacts, it added.

In its earnings release, Caterpillar said many governments have classified its operations as essential to support critical infrastructure. However, as the outbreak took hold worldwide over the past several weeks, the company suspended operations at certain facilities because of "supply chain issues, weak customer demand or government regulations."

As of mid-April, about 75 percent of Caterpillar's primary production facilities continued to operate. Some facilities that were shut down have reopened, but the company could still halt additional operations if business conditions warrant.

To cut costs, Caterpillar has reduced discretionary expenses and suspended 2020 base salary increases and short-term incentive compensation plans for many employees and all senior executives.
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