30.01.2017

Cat slumps but remains optimistic

Caterpillar has reported lower revenues and a substantial fourth quarter loss, but is seeing a pick up in 2017.

The company reported 12 month revenues for machinery and equipment of $35.8 billion, 19 percent lower than in 2015. Pre-tax profits crashed from $3.46 billion last year to just $139 million in 2016. This due to substantial write offs in the fourth quarter.

Moving onto the fourth quarter revenues were almost 14 percent lower at $8.88 billion, of which $3.59 billion was construction related – down eight percent on the year thanks to a 34 percent fall in the Europe, Africa Middle East region and a 16 percent fall in North America. Operating profits however leapt 88 percent to $443 million. Group pre-tax profit however dropped from a loss of $175 million in the same quarter 2105 to a loss in 2016 of $1.26 billion due to non cash write offs for restructuring, pensions and other issues.

Chief executive Jim Umpleby said: “Our results for the fourth quarter, while slightly better than expected, continued to reflect pressure in many of our end markets from weak economic conditions around much of the world. Our team did a great job in the quarter, as they have all year, aligning our cost structure with current demand while preserving capacity for the future. I am confident we are focusing on the right areas: controlling costs, maintaining a strong balance sheet and investing in the key areas important to our future.”