Caterpillar admitted on Friday that their business in Brazil has suffered as a result of political turmoil, and the recession in the country becoming difficult to navigate efficiently and successfully.
The Chief Financial Officer for the company said that the company cut its profit forecasts and saw another cut in its full-year sales. Bradley Halverson said Caterpillar, the world’s largest seller of construction and mining equipment has no weathered the recession as well as they hoped.
The companies saw sales plummet in the first quarter by over 25%, while earnings fell 77% to 46 cents per share. In total Latin American sales 43% with major influences being Brazil and Mexico, low oil prices are hitting demands for their mining equipment.
Brazil is currently in its deepest recession in decades, the toil it has taken on exports has seen a slump in all purchases across the industry.
In an interview with The Financial Times, Mr Halverson stated that the future was not looking up, the business has not endured well and that Fiscal reforms are needed and more co-operation from political parties was needed to see any improvement.
Caterpillar are not the only multinational enterprise that is stating concerns in the Brazilian market, Coca-Cola and PepsiCo have also suggested that the market in the country was currently causing them specific concerns.
Caterpillar is facing its fourth year of falling sales and has seen issues come to light across many countries and changing economies, all of whom are seeing big changes in their markets, these include but are not limited to Brazil, China and Russia. All of which are seeing a decline in sales in machinery, however, the company says it has seen signs of improvement in China and some areas of Europe. However, these improvements have not been enough to halter the decline in sales.
In comparison the company is optimistic for other countries that have felt the force of the recession, further enforcing the need for political interest in the area. Mr Halverson stated that it was optimistic for improvements in the US.