Caterpillar Inc reported a lower third-quarter profit on Tuesday and gave a downbeat forecast, saying demand for its new machinery was suffering because of global economic weakness and an abundance of used equipment.
The world's largest construction and mining equipment maker also cut its full-year revenue outlook for the second time while increasing its estimate of 2016 restructuring costs.
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Shares of Caterpillar were down 1 percent at $85.17.
The company, which last year had announced plans to cut jobs and close factories, expects its challenges to persist into next year, Chief Executive Officer Doug Oberhelman said in a statement.
"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," Oberhelman said.
The company said it expected construction-related equipment sales for the remainder of 2016 and into 2017 to be lower previously anticipated.
"Many of our businesses, including mining, oil and gas, rail and construction, are currently operating well below historical replacement demand levels in many parts of the world," Oberhelman said.
Caterpillar reported a third-quarter profit of $283 million, or 48 cents per share, down from a revised $559 million, or 94 cents per share, a year earlier.
Excluding restructuring costs, earnings per share came to 85 cents, exceeding analysts' estimates of 76 cents.
Revenue fell to $9.2 billion from about $11 billion. Analysts had expected $9.8 billion.
The company estimated 2016 restructuring costs at $800 million, compared with a previous forecast of $700 million.
So far, it has reduced its global full-time and flexible workforce by 14,100 to 108,800 employees as part of the restructuring plan, which runs through 2018.
Caterpillar forecast 2016 profit at $3.25 per share, excluding restructuring costs. Analysts were expecting $3.50.
The company said it expected full-year revenue of about $39 billion, down from a prior outlook of $40.0 billion to $40.5 billion.
Last week, Caterpillar said Jim Umpleby, who heads its energy and transportation division, would replace Oberhelman as CEO on Jan. 1. Oberhelman will stay on as executive board chairman until March 31.
(Reporting by Meredith Davis in Chicago; Editing by Lisa Von Ahn)