(Reuters) – Caterpillar Inc slashed its revenue forecast for 2015 by $1 billion and said it could cut up to 10,000 jobs through 2018, amid a downturn in the mining and energy industries.
Shares of the world’s biggest construction and mining equipment maker, which has also been hit by a slowdown in industrial activity in China, fell as much as 8 percent to a five-year low of $64.65 on Thursday.
The stock also pulled down shares of other industrial companies and knocked 31 points off the Dow Jones Industrial Average.
Caterpillar said it expected revenue to fall for the third straight year in 2015, to $48 billion. Revenue is expected to fall a further 5 percent in 2016, the company said.
Caterpillar said it would cut 4,000-5,000 jobs by the end of 2016, most of them in 2015. The company has already reduced its workforce by more than 31,000 since mid-2012.
Caterpillar had 114,233 employees as of Dec. 31, according to Thomson Reuters data. The company expects to save up to $1.5 billion annually from the restructuring. It expects to incur about $2 billion in pretax costs.
The restructuring could impact more than 20 plants around the world across its three large businesses – construction, resources, and energy and transportation, the company said.
Caterpillar is facing “challenging marketplace conditions in key regions and industry sectors – namely in mining and energy,” Chief Executive Doug Oberhelman said in a statement.
Caterpillar shares were down 7 percent at $65.21 in morning trading. Shares of mining equipment maker Joy Global Inc and industrial conglomerate General Electric Co also fell after the news.
Up to Wednesday’s close, Caterpillar shares had fallen 23 percent this year. (Reporting by Ankit Ajmera in Bengaluru; Editing by Kirti Pandey)
