(Bloomberg) – The world’s biggest maker of mining and construction equipment is predicting that the pain from the coronavirus crisis is far from over.
Caterpillar Inc. said the current quarter will be “more significantly impacted” by the pandemic after profits for the first three months of the year trailed analysts estimates. The Deerfield, Illinois-based company also shelved its traditional earnings forecast for 2020 as the fallout from the virus jolts customers in mining, construction and energy.
Caterpillar is taking steps to slash costs and pare production in the face of deteriorating commodity markets that stand to crush demand for the company’s signature yellow machines. BofA Securities Inc. analyst Ross Gilardi downgraded the company’s stock this month, and said that weakness in its energy business was “a problem that is not going away.”
In a stark departure from his normally staid commentary on earnings calls, Chief Executive Jim Umpleby said he never envisioned the significant effects that the virus has imparted on the company’s business thus far.
“The impact of Covid-19 on our business has been significantly more severe and chaotic than any cyclical downturn we had envisioned,” Umpleby said. “The ultimate impact of the pandemic on our 2020 results remains uncertain, and will be based on the duration of the virus and the magnitude of the economic impact on global demand for our products.”
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