LITTLE ROCK (October 25, 2016) ~ The news gets worse for Caterpillar Inc. after the announcement of layoffs at the North Little Rock plant nearly a month ago as the company announced today their third-quarter 2016 sales and revenues of $9.2 billion were down 16 percent from $11.0 billion in the third quarter of 2015.
In a press release from Caterpillar, CEO Doug Oberhelman attributes the low numbers to continued economic weakness in the manufacturing industry in the United States.
“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged. In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks.” Mr. Oberhelman said.
“There were a few bright spots this quarter. Both the construction industry and our machine market position improved in China. Most commodity prices, while low, seem to have stabilized. Parts sales have increased sequentially in each of the last two quarters. Our machine market position and quality remain at high levels and our work on Lean and restructuring are continuing to help us lower costs.”
As Caterpillar Inc. heads into the final quarter of the fiscal year they hope to chug through this lagging phase in manufacturing and find promise in the 2017 fiscal year.
“I’m pleased with how Caterpillar has responded and our team’s incredible focus on reducing costs and pulling through profit despite sluggish end markets. In the third quarter, despite a $1.8 billion decline in sales and revenues, our operating profit pull through was significantly better than our target range,” Oberhelman said.
“Lower variable manufacturing costs of $234 million and lower period costs of $420 million enabled us to offset much of the negative impact from a weak sales environment and continue investment in products and digital capabilities.”