Drop in mining sales takes toll on Komatsu Q2 results
Japanese equipment maker Komatsu (TYO:6301) became the latest victim of a global slowdown in demand for construction and mining gear as it reported a 19% drop in second-quarter profit.
The company, the world’s second-largest supplier of industrial machinery, said net income declined to US$217 million (32.6 billion yen) in the quarter ended in September, from a revised 40.3 billion yen a year earlier.
Construction and mining equipment account for almost 90% of the Tokyo-based company's revenue.
Komatsu, however, did not change its previous outlook for the fiscal year ending March 31, 2016. It still expects full-year net income to drop around 10% to 138 billion yen, while operating profit will probably fall 8.7% to 221 billion yen.
The Asian equipment manufacturer’s main competitors have not done any better. Last week, Caterpillar (NYSE:CAT) missed on earnings and slashed its profit outlook for the year. And yesterday, Hitachi Construction Machinery, Japan’s second-biggest producer of building machinery, cut its sales and profit targets for the year, saying that the slowdown in demand in China had spread to its markets in the developed world.