Caterpillar Takes a Hit as Chile Riots Add to Global Uncertainty
Caterpillar Takes a Hit as Chile Riots Add to Global Uncertainty
(Bloomberg) -- Add the riots in Chile and political issues in other parts of Latin America to troubles dimming the outlook for Caterpillar Inc.
On Wednesday, the world’s largest maker of mining and construction equipment reported that its three-month rolling average sales growth in the region slowed to 4% in October, matching the January data that was the weakest since mid-2017.
Latin America accounted for about 9% of Caterpillar’s revenue in 2018, according to data compiled by Bloomberg. Weakness in the region accelerated the slowdown in the company’s worldwide sales growth to 3%, the worst since April 2017.
“There’s the social unrest in Chile, which is an important mining market,” Larry de Maria, an analyst at William Blair, said in a telephone interview. “Argentina has a difficult political situation and Brazil hasn’t really improved the way people hoped it would improve.”
The shares fell 1.3% to $144.49 on Wednesday in New York, extending this week’s decline.
Last month, Caterpillar refrained from giving sales guidance, citing the uncertain global economic outlook. Last week, the company said it’s implementing layoffs of temporary workers at its plant in Michigan and across the globe, in line with its move to cut production to match demand.
Security forces in Chile, the world’s largest copper producer, struggled to control riots across the capital Tuesday evening, prompting President Sebastian Pinera to call for a national agreement on peace and a new constitution.
In Argentina, Alberto Fernandez’s surprise victory in a primary vote put the leftist on course for the presidency. In Brazil, the largest-ever auction of oil deposits flopped, signaling the region’s biggest economy will struggle to rely on investments to jump start weak growth.
To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net
To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Steven Frank
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