At present, the US and China have put a stop on their trade war, but caterpillar is still in great deal of pain. On Wednesday, one of the spokesperson of Caterpillar stated that its sale in Asia-pacific fell down to 22% since last year, since the demand of the vehicle has declined in China. Moreover, the company also missed forecasts for revenue as well as earnings.
During one of the conferences, Caterpillar stated that there is a possibility that its overall profit for the present year might be lower than expected. At present Caterpillar’s share is considered as the biggest component in Dow, as it falls by 4%.
Spokesperson of Caterpillar said that the overall manufacturing costs became high since the rise of tariff as well as labor expenses. Moreover, slow global economy is also causing a lot of pressure on Caterpillar. The company recorded slow sales in Asia along with various other regions of the world viz. Africa, Europe and Middle East. The sales of Caterpillar fell by 5% in comparison to previous year.
Contrary to this, North America is still considered as a strong point for the company as the revenue rose by 28%, this increased the sales of Caterpillar by 5%. During a press meet, Caterpillar stated that sales of oil as well as gas equipment fell by 11%. This happened as in the Permian Basin the demand of new equipment was way too low.
Permian Basin is America’s hotbed for revolution of shale gas, this is a boom in oil production which made America to become more self dependent and leave most of its dependency on OPEC. Caterpillar’s spokesperson further commented that there is a possibility that gas as well as oil business could recover by the end of the year. Since the company is reporting slump in sales around the world it doesn’t want to have any inconveniences in US.