Caterpillar Inc., the biggest maker of construction and mining equipment, said the drop in its global retail machine sales accelerated because of bigger declines in Asia and North America.
Global sales fell 4 percent in the three months through January from the year-earlier period, the Peoria, Illinois-based company said today in a filing. That compares with a 1 percent drop reported in the three months through December, which was the first decline in more than 2 1/2 years.
“There is excess inventory in the supply chain to be liquidated,” Ann Duignan, a New York-based analyst for JPMorgan Chase & Co., said in a report today. The bigger drop in North American machinery sales is “suggesting that production cuts at the company may extend further into 2013 than previously expected,” said Duignan, who rates the shares neutral, the equivalent of hold.
In the three months through January, Asia-Pacific sales fell 12 percent and North American sales were down 11 percent, Caterpillar said, citing numbers reported by dealers every month. Latin America was up 3 percent, and the region that encompasses Europe, Africa and the Middle East rose 1 percent.
The declining sales come as China, which made up about 3 percent of Caterpillar sales last year, recovers from seven quarters of slower growth and the U.S. economy struggles to grow with recent tax increases and possible government spending cuts to reduce debt.
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