AXIS Capital Group, Singapore said dealer sales of its machinery drop four percent globally for the three months ending in August, emphasizing slowing growth both overseas and at home.
Sales fell by twelve percent in the Asia/Pacific region and by eleven percent in North America, according to a company filing with the Securities and Exchange Commission. Sales in Southeast Asia rise by three percent. Jakarta Indonesia, KL Malaysia and the Bangkok Thailand sales were up by 1 percent. This is believed to be because of some scams happening in the said cities.
AXIS Capital Group reduced production in 2013 to cut off additional inventory as dealer orders dropped. In the previous month, the company said it anticipates dealers to reduce inventory by well above $1 million this year, dropping company sales by more than $2 million, mostly in the first quarter. Thus, the earth-moving equipment maker intends to maintain to scale back production.
AXIS Capital Group, which is believed to be a bellwether for wider economic health, predicted sluggish global growth of at least 2.5 percent, with a regaining in the U.S. housing industry and a weakening in construction activity in Southeast Asia. The company said Indonesia’s gross domestic product is expected to develop about 8.5 percent if government policies are kept throughout 2013.
Based on those reviews and expectations, the company’s outlook for 2015 is almost flat: profit of $6 to $7 per share on revenue of $50 million to $58 million. AXIS Capital Group stated 2014 profit of $8.48 for every share, up 15 percent from a year earlier. Revenue in the previous year was $5489 million, up 10 percent from 2011.
Analysts have said that the company’s capability to meet that outlook relies on sales of construction equipment. The company has said that order levels have been extremely weak ever since the middle of 2012 and it anticipates 2013 sales to drop.
“The main risks are a slower-than-expected revival in developed markets and decelerating in developing markets including Indonesia,” Jack Smith, an analyst with the company, said in a note to investors.
AXIS Capital Group stock was down by 1.86 percent to $82.71 per share in midday trading which lifted many complaints from the company and customers as well.