Caterpillar fourth-quarter results take hit but outlook lifts stock

Thu Jan 28, 2016 12:25pm EST
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By Nick Carey

CHICAGO (Reuters) - Caterpillar Inc CAT.N on Thursday reported results that showed a continued slump across most of its businesses, but forecast earnings above estimates for 2016, sending shares up nearly 3 percent.

The world's largest construction and mining equipment maker has been restructuring aggressively to cut costs because of slower growth in markets including China and Brazil and plunging commodity prices that have hurt customer demand.

The company warned that 2016 would be another grim year, but said its focus on costs was paying off.

"Cost management, restructuring actions ... are helping the company while sales and revenues remain under pressure from weak commodity prices and slowing economic growth in developing countries," Chief Executive Doug Oberhelman said. "We are benefiting now and expect to even more in the future when markets rebound."

The Peoria, Illinois-based company said its outlook for 2016 "does not anticipate improvement in world economic growth or commodity prices."

Caterpillar sees 2016 revenue within a range of $40 billion to $44 billion. The midpoint of that range, $42 billion, is around $3.5 billion below its forecast in October.

Caterpillar expects full-year 2016 earnings of $4.00 per share, excluding restructuring costs, compared with the average estimate of $3.48 per share, according to Thomson Reuters I/B/E/S. Including restructuring costs, Caterpillar said it expects 2016 EPS of $3.50.

Full-year earnings per share in 2015 were $4.64.   Continued...

The CAT logo is seen on back of a Caterpillar excavator machine at a work site in Detroit, Michigan January 25, 2013.   REUTERS/ Rebecca Cook