Cat to bite Wilhelmsen?

A depression in the high and heavy market will lead to a reduced profit at Norwegian owner Wilh Wilhelmsen in the second quarter, analysts say.

Oslo-listed WW ASA is projected to report a bottom line of $59m for the quarter when it releases its results tomorrow, according the consensus expectations released by Arctic Securities, down from $79m a year ago.

Core operating profit is expected to fall from $106m to $76m year-on-year.

“Mining equipment sales remain weak according to Caterpillar and it was also reported that dealer inventories dropped by another $500m during the second quarter of 2014,” said Bjorn Kristian Roed of Danske Bank in a report today.

“In addition, John Deere reported that development in agricultural shipments was unfavourable as sales of agricultural equipment have been trending downwards, most likely as a consequence of declining commodity prices.”

Analysts at DNB Markets explain WW ASA’s numbers should be stronger than in the previous quarter.

They note that while Korean car sales are at a two-year high Caterpillar’s mining sales are down 37% year-on-year.

“However, it is positive that Caterpillar sees more stability in mining,” DNB Markets analysts led by Nicolay Dyvik said.