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