Caterpillar Inc (CAT.N), the world's largest maker of construction equipment, reported a 13 percent fall in sales to dealers, particularly in Asia-Pacific, for the three months through February.
The drop compares with a 4 percent decline in the three months to January and a 1 percent fall in the period ended in December, the company said in a regulatory filing. (r.reuters.com/bes76t)
Caterpillar shares fell as much as 2 percent to $86.42 in morning trading on the New York Stock Exchange on Wednesday.
Dealer sales in Asia-Pacific, which accounted for about a quarter of Caterpillar revenue in 2012, fell 26 percent in the latest three months. Sales in North America, which contributed 37 percent of revenue last year, dropped 12 percent.
Global sales of power systems, used in industrial job sites and energy projects, fell 7 percent.
"We believe a tough comparison and still soft end-market backdrop are the primary drivers for the declines in machines and power systems," William Blair & Co analyst Lawrence De Maria wrote in a note to clients.
Customers are also increasingly renting machinery, rather than buying new equipment, De Maria said.
Caterpillar sells the majority of its machinery and power systems to independently owned and operated dealers and original equipment manufacturers.
High inventory has been a challenge for the Peoria, Illinois-based company, which slashed production last year to tackle the problem.
Caterpillar reported a 55 percent drop in fourth-quarter profit in January. The company said it had an oversupply of products in China but hopes to sell some of them by June.
The company is counting on a recovery in sales in the second half of the year on an improving global economy, De Maria said.
(Reporting by Tej Sapru and Sagarika Jaisinghani in Bangalore; Editing by Roshni Menon and Saumyadeb Chakrabarty)