Caterpillar Recovery Threatened by Oil Price Plunge
Caterpillar Inc. (CAT), already battered by a slump in demand for its mining machinery, faces slowing sales of compressors, pumps and gas turbines as oil companies reduce spending.
The impact will be felt by Caterpillar in early 2015 as drillers cut back and exploration declines, Chairman and Chief Executive Officer Doug Oberhelman told Bloomberg Television in a Dec. 22 interview.
While Caterpillar forecast in October that sales will be flat to slightly up in 2015, that view might now be optimistic given the decline in crude prices in the past two months, Sameer Rathod, an analyst at Macquarie Group Ltd., said in a Dec. 16 report.
“The bottom line is, it’s a new risk for Caterpillar’s earnings outlook for 2015,” said Matt Arnold, a St. Louis-based analyst for Edward Jones & Co.
Caterpillar’s energy and transportation…
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