NEW YORK: US heavy equipment maker Caterpillar has reported a steep drop in second-quarter profit and lowered its full-year sales forecast, citing the sluggish global economy and a stronger dollar.

The stronger dollar negatively impacted sales in Europe, Africa and Middle East, helping to push them down 12 percent. North America sales fell 7.0 percent on lower demand in the construction and rail sectors.

Caterpillar said profit fell to $710 million in the April-June quarter, down 29 percent from $999 million a year ago.

Adjusted earnings tumbled 26 percent to $1.16 per share. Excluding restructuring costs, earnings per share at $1.27 were in line with market expectations.

Sales fell 13 percent to $12.3 billion for the maker of equipment for the construction, mining and oil sectors, considered a bellwether of the global economy. That missed analysts’ consensus estimate of $12.6 billion.