.jpg)
5 hours ago
1
Article content
(Bloomberg) — Caterpillar Inc. expects slightly lower sales this year if Trump administration tariffs remain in place and the economy dips into a recession in the second half.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
Article content
The guidance, in line with previous expectations, came as the heavy-equipment maker posted first-quarter earnings that fell short of analysts’ estimates. The company painted two scenarios in its results’ presentation, forecasting operating profit to be within its annual target range if factoring in tariffs and a recession.
Article content
Article content
Without levies, profit would be at the top end of that range, with sales little changed from last year, Caterpillar said.
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
Shares of the company dropped 0.6% in early trading in New York on Wednesday.
Article content
The results at Caterpillar — a bellwether for the health of the global economy — come as businesses around the world navigate the turmoil triggered by the sweeping tariffs threatened by US President Donald Trump. That uncertainty has left many executives struggling to forecast what demand may look like through the rest of the year.
Article content
Caterpillar said it expects an additional cost headwind of $250 million to $350 million in the second quarter from tariffs, “net of initial mitigation actions and cost controls.”
Article content
Company executives expressed some hope in an earnings call Wednesday that tariff impacts will be mitigated. The firm also noted that most of the impacts facing Caterpillar come from retaliatory tariffs China struck on the US this year.
Article content
Article content
“We’re cautiously optimistic that there will be some trade deals struck and that the tariff impact will be lower than it is currently,” said Jim Umpleby, Caterpillar’s top executive. “Obviously it’s a very dynamic situation.”
Article content
The company posted adjusted earnings per share of $4.25, missing the $4.32 average estimate of analysts polled by Bloomberg, with the company citing lower sales volume driven mainly by the impact from changes in dealer inventories.
Article content
“While the headline EPS/revenue miss look disappointing, the guts of the report/outlook aren’t that bad,” analysts at Vital Knowledge said in a Wednesday note.
Article content
Caterpillar’s earnings call marked a finale for Umpleby as CEO, who will step down from the role on Thursday but remain as chairman. Umpleby, 67, took over in 2017 when Caterpillar was struggling through the sharp downturn of the so-called commodity super cycle and as growth in China, the world’s second-largest economy, matured.
English (US)