Caterpillar Forecasting 4% Growth in Construction & Power Systems

Caterpillar Inc. reported Q4 sales and revenues fell 10 percent year-over-year to $14.402 billion, impacted negatively by a goodwill impairment charge of $580 million and positively by a tax settlement of $300 million. Machinery & Power Systems (M&PS) revenue dropped 11 percent in Q4 while operating profit increased 37 percent to $1.27 billion but was offset by poor performance in the Resources segment. Sales and revenue for the full year 2013 slid 16 percent to 55.656 billion from $65.875 billion in 2012.

An expected drop in mining sales was worse than anticipated for Caterpillar. Resource industries sales dropped 48 percent year-over-year in the fourth quarter for a loss of $2.705 billion in sales volume. Dealers reduced inventory in fourth quarter in response to weaker demand. Caterpillar said the mining industry is focused on increasing productivity at existing mines rather than continuing to increase capital expenditures as it has done over the past several years. Sales were down in every region with the most significant decline in the Asia/Pacific area, primarily due to lower mining sales in Australia.