The shares of Caterpillar Inc. (NYSE:CAT) plummeted 6% to $83.68 per share after the company reported weaker-than-expected financial results for the third quarter and reduced its full-year 2013 outlook.

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Caterpillar earnings analysis

During the third quarter, Caterpillar Inc. (NYSE:CAT) reported $1.45 earnings per share and $13.42 billion in revenue, significantly lower than its $2.54 earnings per share and $16.45 billion revenue in the same period a year earlier.

For the full year 2013, the company reduced its outlook to $5.50 earnings per share, and revenue to around $55 billion. Its previous guidance was $6.50 earnings per share, and revenue in the range of $56 billion to $58 billion.

Doug Oberhelman on Caterpillar’s performance

In a statement, Doug Oberhelman, CEO of Caterpillar Inc. (NYSE:CAT) said, “This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year. That is a 17 percent decline from 2012, with about 75 percent of the drop from Resource Industries, which is principally mining. We expect Resource Industries to be down close to 40 percent for the full year and Power Systems’ and Construction Industries’ sales to each be down about 5 percent.”

Caterpillar Inc. (NYSE:CAT) said that it’s hard to forecast the demand for equipment because orders for its new mining equipment started to decline significantly in the middle of 2012. Currently, the orders remain at very low levels, but the company expects order rates to improve later this year.

“Unfortunately, order rates have not picked up much despite continuing strong commodity production. That has caused us to ratchet down our sales and revenues outlook as we have moved through 2013,” said Oberhelman.

Weak sales performance

Due to its weak sales performance, Caterpillar Inc. (NYSE:CAT) was forced to eliminate 13,000 employees globally and to shut down many of its plants temporarily. The company furloughed thousands of salaried and management employees, lowered incentive pay and capital expenditures and executed general austerity measures across the company.

Caterpillar Inc. (NYSE:CAT) expects to limit the decline of its operating profit this year to approximately 30% of sales and revenue change. JPMorgan Securities analyst Ann Duignan commented that the reduction on the company’s profit outlook for 2013 demonstrates that the layoffs, furloughs, and other cost reduction measures implemented by the company were not fast enough to achieve its goals. She said, the “costs are not coming out as quickly as expected.”