Fracing slowdown weighs on Caterpillar as sales of pumps drop

NEW YORK (Bloomberg) - The U.S. shale slowdown is weighing on Caterpillar Inc., which is selling fewer of the pumping units used in fracing.

The machinery giant reported on Wednesday that it had a decline in third-quarter sales of reciprocating engines. Oil and gas-related revenue within the company’s energy and transportation segment dropped about 9% year-on-year, a bigger slide than any other primary category.

While most of Caterpillar’s business comes from the construction and mining industries, its sales into the energy business offer more evidence of how well-completion activity is falling in the U.S. amid stubbornly low oil and natural gas prices, and as exploration and production companies prioritize returning cash to investors over boosting output.

Caterpillar made no mention of the Permian basin in its earnings release, unlike the previous quarter, when it highlighted the slowdown in activity in the largest U.S. oil patch.