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Caterpillar on Friday reported a smaller-than-expected decline in second-quarter earnings, helped by lower manufacturing costs, even as the pandemic made customers wary of big equipment purchases.

The manufacturer, a bellwether for economic activity, said its financial results would be impacted by continued global economic uncertainty.

As a result, it declined to reinstate its earnings guidance which was withdrawn in late March. Share repurchases will also remain suspended this year. A recovery in machine retail sales in Asia and slowing sales declines in the Europe, Africa and Middle East region and Latin America have raised hopes that the worst is over for the construction and mining equipment maker. Overall, retail sales fell 23% in the second quarter.

Caterpillar expects a similar decline in the current quarter, resulting in around $400 million reduction in inventory at its dealers compared with a $1.4 billion decrease during the second quarter.

Midday Friday, the company’s shares were down 4.2% at $130.8 on the NYSE. Caterpillar’s earnings come a day after the U.S. economy reported its deepest contraction since the Great Depression.

The world’s largest economy shrank at a 32.9% annualized rate last quarter with a 37.7% plunge in spending on equipment. A resurgence in new coronavirus cases has also dimmed the outlook for the current quarter.

There is not much to cheer outside the United States, either. The International Monetary Fund now expects deeper contraction in global output this year. With lower demand oil prices have also fallen, hitting spending by Caterpillar’s customers on non-residential construction.

Quarterly profit came in at 84 cents per share, down 70.3% year-on-year but topped the 68 cents per share expected by analysts, Refinitiv Eikon data showed.

Revenue fell 31% to $10 billion with sales declining across all regions and in its three primary segments of construction, mining, and energy and transportation.

The company returned $600 million to shareholders in the latest quarter.

(By Rajesh Kumar Singh; Editing by Jason Neely, David Evans and Marguerita Choy)