Caterpillar Inc. estimates $300 million in sales and $100 million in operating profit will slip away this year, mostly in the second quarter, due to the March 11 earthquake and tsunami in Japan.
Although its Japan-based employees suffered no injuries and its plants in the region were not damaged, the event has taken a toll on the overall supply chain for construction machinery. Many of the industrial components and whole goods are produced in Japan or move through the country on their way to end-users.
"As a result, we are experiencing sporadic production disruptions at many of our facilities around the world," the Peoria, Ill.-based company said in an April 29 first-quarter earnings report. "We expect the disruptions will have a negative impact on sales, factory efficiency and costs—particularly in the second quarter."
Cat reported a record quarterly profit of $1.2 billion, up 426%, on sales of $12.9 billion, up 57% over the same period last year, and increased its annual sales forecast to $52-54 billion from $50 billion.