Caterpillar Inc. (CAT) shares suffered their biggest single-day decline in nearly a decade after it posted weaker-than-expected fourth quarter earnings Monday and forecast a "modest" in increase in 2019 sales it linked to weakening demand in China.
Adjusted earnings for the three months ened in December came in at $2.55 per share, Caterpillar said, up 16% from the same period last year but well shy of he Street consensus of $2.98. Group revenues, Caterpillar said, rose 11% to $14.34 billion and were largely in-line with the consensus forecast. Caterpillar said it expects 2019 profit to increase to a range of $11.75 to $12.75 per share, compared to the Refinitiv consensus forecast of $12.73 per share.
"In 2018, Caterpillar achieved record profit per share and returned significant levels of capital to shareholders," said CEO Jim Umpleby. "Our global team remained focused on serving our customers, executing our strategy and investing for future profitable growth."
"Our outlook assumes a modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment. We will continue to focus on operational excellence, including cost discipline, while investing in expanded offerings and services to drive long-term profitable growth," he added.
Caterpillar shares fell 9.1% to close at $124.37, the biggest single-session decline since March 2009 and a move that would trim the stock's three-month gain to around 7.4% and value the Peoria, Ill.-based Dow component at about $73 billion.
Caterpillar also said its order backlog fell $800 million over the final three months of the year to $16.5 billion, although energy and transportation sales rose 11.5% to $6.287 billion. Resource industry sales, Caterpillar said, rose 489 million to $2.979 billion.
The U.S. dollar index, which benchmarks the greenback against a basket of six major global currencies, rose 1.1% over the three months ending in December, but ended the year 3.8% higher than the fourth quarter of 2017.