Caterpillar Inc. has acknowledged what Brandon Millican of Malta, MT, already noticed: It’s getting even harder to sell heavy equipment into an economy weighed down by falling oil production.
The Peoria, Ill.-based maker of construction and mining equipment issued lower than expected first-quarter estimates for revenue and profit but left its forecast for 2016 unchanged. Meanwhile, Mr. Millican, who runs construction-related businesses, has resorted to trying to sell three idle Caterpillar generators on Craigslist.
Caterpillar now projects profit in the quarter of 50 cents to 55 cents a share. Excluding restructuring costs, it forecast profit of 65 cents to 70 cents a share. Analysts were expecting 97 cents a share. “The question remains whether this revised guide is adequately conservative,” said Ann Duignan, an analyst for J.P. Morgan Chase.
Mr. Millican spotted an opportunity several years ago when shale-oil production soared in western North Dakota. He bought three Caterpillar generators for roughly $138,000 each and rented them to oil-production firms needing mobile electric power for their equipment.
Now that oil exploration and production have plunged, Mr. Millican can’t find anyone to rent those machines and is trying to sell them on Craigslist. “I’d rather not have them sit around if oil takes five or 10 years to come back,” Mr. Millican said.