Caterpillar earnings today missed Wall Street's estimates, hurt by a combination of weak sales in China, and higher production and restructuring costs. 

The heavy equipment maker retained its 2019 earnings outlook, but said the full-year earnings are expected to be at the lower end of its forecast.

The Illinois-based company, a proxy for global economic activity, benefited in the past year from the strongest global growth since 2010. 

However, a tariff war between the US and trade partners including China has sapped business confidence, dampening economic activity. 

The International Monetary Fund yesterday lowered its forecast for global growth this year and next, its fourth downgrade since October. 

But Caterpillar still expects moderate sales growth this year, helped by a recovery in demand for machines for the oil and gas sector. 

Its construction equipment division, the biggest source of the company's revenues, recorded a 22% year-on-year fall in sales in Asia-Pacific due to lower demand, mainly in China. 

Sales of oil & gas equipment were down in North America. 

The company saw a nearly 2 percentage point increase in its cost of production during the quarter from a year ago on the back of higher tariff bill and labor costs. 

Andrew Bonfield, CAT's chief financial officer, told Reuters that the company paid $70m in tariffs costs during the June quarter. 

In the second quarter, CAT reported net income of $1.62 billion, or $2.83 per share, compared with $1.71 billion, or $2.82 per share, a year ago. 

Analysts surveyed by Refinitiv, on average, expected earnings of $3.11 per share.

The company's revenues grew 3% year-on-year to $14.4 billion.

The company retained its full-year earnings forecast of $12.06-$13.06 per share. Adjusted profits for 2019 are estimated to come in between $11.75 and $12.75 per share.