NEW YORK: US heavy equipment maker Caterpillar said Tuesday that the plunge in oil prices took a hit on the company's earnings in the fourth quarter of 2014.
It also said it did not expect much of an upturn this year, with mining commodities still in a slump as the global economy grows slowly and with sweeping cutbacks in investment by the oil industry.
The company reported a slight decline in fourth quarter revenues from a year earlier and a sharper drop in profits, falling short of its own forecasts.
Total revenues were down 1.1 percent from the fourth quarter of 2013 to $14.2 billion, and net profits dropped by nearly a quarter to $757 million.
Earnings per share fell to $1.23 from $1.54; EPS stripped of extraordinary items, like restructuring costs, were $1.35, down from $1.68.
Analysts had expected adjusted EPS to come in at $1.55.
Chairman and chief executive Doug Oberhelman said that despite the profit miss in the fourth quarter, the company had a better year than originally predicted, and improved on 2013.
"Our emphasis on cost management, operational execution and cash flow helped us deliver better profit per share than both 2013 and the 2014 outlook we provided at the start of the year," he said in a statement.
For the year, Caterpillar's revenues came in at $55.2 billion, down just 0.8 percent from 2013, and broad profits per share rose 2.3 percent to $5.88.
The company said it expected revenues in 2015 to fall 10 percent to $50 billion, for profits of $4.60 a share.
"We expect world economic growth to only improve modestly in 2015. The relatively slow growth in the world economy and continued weakness in commodity prices -- particularly oil, copper, coal and iron ore -- are expected to be negative for our sales," the company statement said.
"The recent dramatic decline in the price of oil is the most significant reason for the year-over-year decline in our sales and revenues outlook," said Oberhelman.
"We've also lowered our expectations for construction equipment sales in China," he added.
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