CAT Expect Huge Drop In Profit

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Yuchen Wang International Studies 150
Business Brief

CAT Expect Huge Drop In Profit

Caterpillar Inc. is the biggest company of manufactory mining and construction equipment in the world. The analysts of this company expect that the decrease of demand of mining equipment especially from Chinese buyers will affect 40 percent profit drop down.
As the giant of mining and construction equipment they also produces diesel, natural gas engines, industrial gas turbines and diesel electric locomotives. Those extra businesses’ net income expected $961 million or $1.42 for each share. In the year-earlier period the net income was $1.59 billion or $2.37. For total revenue compare this result with the first quarter of last year is going fall to $13.74 billion from $15.98 billion. Caterpillar said he would report Monday before the markets open that this quarter will be toughest quarter for caterpillar in while. As the analyst Fleck said mining is the main hurt of their business as the third of their revenue and half of operating profit.
The mining will become the hurt of they are profit in the next quarter basically caused by two reasons. And in the general slowing economic growth and commodity price falling down occurred worldwide reduce orders of new machines. The first reason is the temperature of this winter is going to be cooler and longer than normally expected. Compare with the shorter and wormer winter in last year it is going to be tough environment for the company’s business. In addition, because of this company is the biggest international producer of mining and construction equipment, 70 percent of their business are based on out side of America, in that area the huge percent is from china. As the second largest economy in the world in this quarter they are showing 7.7 percent