Caterpillar pointed to signs of modest recovery in its long-beleaguered mining and resources division amid better prices, even as it reported a steep loss in the fourth quarter Thursday. Caterpillar, which manufacturers equipment for the construction, mining and energy industries, cited "early indications of modest recovery in several of our businesses," due in part to higher commodity prices.
But Caterpillar reported a loss of $1.2 billion in the fourth quarter, compared with a loss of $94 million in the same period of 2015.
Revenues fell 15.2 percent to $9.6 billion. Over the last two years, Caterpillar has cut staff and shuttered facilities in response to the downturn.
"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," Caterpillar chief executive Jim Umpleby said.
The company's mining business has been battered by major capital spending cuts and layoffs at large companies Anglo American. It appears sales to this segment "may have bottomed," Caterpillar said, one of several sources of optimism about 2017 and beyond.
Still, the company cautioned that it still expects flat capital spending in mining in 2017, and the availability of used construction equipment in North America could depress sales in that business. In addition, power generation sales remain weak in energy.
Caterpillar projected 2017 sales of between $36 billion and $39 billion, compared with $38.5 billion last year.
Earnings per share for 2017 are projected at $2.30, with adjusted profit at $2.90, both below the $3.04 analyst forecast.
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