Slowing global economy slams farm equipment maker Caterpillar

Caterpillar, Nvidia feeling the effects of weaker demand in China

Rosecliff Capital founder Mike Murphy, Fox News contributor Liz Peek and FBN’s Susan Li on the impact of China’s economic slowdown and concerns over the global economy on stocks.

A slowing global economy is taking a toll on Caterpillar, which is cutting its outlook for the year after profits and revenue slid in the three months through September.

Dealers slashed inventories by about $400 million, hinting at a pull-back in spending by businesses including farms that have seen lower demand for crops amid a prolonged trade fight between the U.S. and China. Dealers increased inventories by $800 million last year. Caterpillar's revenue declined about 6 percent to $12.8 billion.

Net income was $1.49 billion, or $2.66 per share, well short of the $2.90 that Wall Street was looking for, according to industry analysts surveyed by FactSet. It's also weaker than the $1.72 billion the company earned in the same period last year.

The Deerfield, Illinois, company cut its per-share profit expectations for the year to a range of $10.90 to $11.40 from an earlier forecast of $12.06 to $13.06.

During the last three months of 2019, Caterpillar expects demand from equipment users to be flat while dealers trim inventory "due to global economic uncertainty," CEO Jim Umpleby said in a statement.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Caterpillar tumbled more than 4 percent before the start of regular trading in New York on Wednesday.