Sales down 12% for Cat

US-based equipment manufacturer Caterpillar has reported that, for its construction segment in the fourth quarter of 2019, total sales decreased by 12% compared to the same quarter in 2018.

For the fourth quarter of 2019 total sales for the construction industries segment was US$5.020 billion, down from the fourth quarter of 2018’s US$5.705 billion. Caterpillar said that this decline was due to dealers decreasing their inventories.

Sales in North America declined by 18% in the fourth quarter of 2019 compared to 2018 and in EAME by 20%. There was better news for Latin America, which saw sales increase by 9%, driven by road and residential construction activities. Asia Pacific saw no percentage change from the fourth quarter of 2018.

The company’s resource industries segment – which includes mining equipment – saw fourth quarter sales decline 14% in 2019 compared to 2018. Caterpillar attributed this to economic uncertainty negatively affecting sales.

As a whole, Caterpillar reported full year sales and revenues in 2019 of US$53.8 billion, down 2% compared to 2018’s US$54.7 billion. Full-year profit was US$10.74 per share in 2019, compared with profit of US$10.26 per share in 2018.

“While sales declined modestly in 2019, we delivered an operating margin and free cash flow consistent with our long-term targets and continued to invest in services and expanded offerings,” said Jim Umpleby, Caterpillar Chairman and CEO.

Looking to the future, Umpleby sounded a cautious note when he warned that the company expect continued global economic uncertainty to pressure sales in 2020 and cause dealers to further reduce inventories.