June 13, 2019
(Reuters) – Global industry bellwether Caterpillar Inc said on Thursday its retail sales for machines used in construction and mining in the Asia-Pacific region fell 4% for the rolling three-month period ended May, pointing to weakness in China.
China accounts for up to 10% of the company’s sales and is critical to its growth prospects as it is one of the world’s largest commodities importers.
Despite the drop, machine retail sales globally rose 6% during the period, the world’s largest construction equipment maker said in a regulatory filing.
Caterpillar had spooked investors in April when its first-quarter results showed rising costs hitting margins in its construction equipment business and tepid sales in the Asia-Pacific region pointing to subdued growth in China.
“Results are running slightly ahead of 2Q estimates, though given the uncertain global macro backdrop and tougher comparisons investor concerns into 2H are building,” Jefferies analyst Stephen Volkmann said.
Total retail sales for construction equipment in Asia Pacific fell 12% and that for machines used by mining companies slumped 63% in the period, the company said.
Caterpillar had said in April during an post-earnings call that it expects full-year sales in China to remain flat.
Worldwide retail sales for construction machines rose 2% and that for resources gained 21% for the rolling three-month period ended May.
Shares of the company were marginally up at $127.32 in morning trade.
(Reporting by Rachit Vats and Sanjana Shivdas in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)