CAT Caterpillar Inc

By Andrew Tangel 

Caterpillar Inc. trimmed its sales outlook for this year and said revenue slid in 2016 for the fourth year in a row, evidence a prolonged slump in mining and construction is still unfolding.

The Peoria, Ill.-based heavy-equipment giant said the recent strengthening of the U.S. dollar could drag down sales this year, after revenue fell 18% in 2016 to $38.5 billion.

Caterpillar's losses deepened in the fourth quarter. The company reported a loss of $1.2 billion, or $2 a share, compared with a year-earlier loss of $94 million, or 16 cents. Revenue fell to $9.6 billion from $11 billion a year ago.

"We continue to execute in a challenging economic environment and are focused on improving operating margins, profitability and shareholder returns," Caterpillar Chief Executive Jim Umpleby said. "While we see signs of positive activity in some of our key end markets, the overall economic environment remains challenging."

The manufacturer's troubles were compounded by higher-than-expected restructuring costs, losses related to pension and retirement benefits and a $595 million impairment tied to its 2011 billion acquisition of mining-equipment maker Bucyrus International Inc.

Excluding those items, the company said it earned 83 cents per share, flat with a year ago and above the 66 cents expected by analysts polled by Thomson Reuters. Analysts had expected revenue of $9.8 billion.

Caterpillar's shares fell about 1% to $97.13 in early trading Thursday.

The dollar's strengthening since President Donald Trump's election in November could make 2017 a tough year for manufacturers such as Caterpillar that depend on exports. A stronger dollar makes American products more expensive overseas, and foreign sales less valuable.

Caterpillar said the dollar's climb is one reason it lowered its revenue outlook for the year to a range of between $36 billion and $39 billion.

The midpoint would be lower than the approximately $38 billion it telegraphed in December, and potentially mark a fifth-straight year of declining revenue for the world's largest mining and construction equipment maker.

Caterpillar said it expects earnings per-share of about $2.30 this year, or $2.90 excluding estimated restructuring costs of about $500 million.

Caterpillar's restructuring also weighed on its global workforce, which it has cut recently. By the end of 2016, the company counted 106,400 employees, down from 118,700 a year ago. Most of the reductions were made in the U.S.

Caterpillar's scheduled call with analysts on Thursday morning will review the company's first quarterly earnings report with Mr. Umpleby as chief executive. He succeeded Doug Oberhelman, who is slated to remain chairman of the of board through March.

Analysts and investors will be listening for clues as to how Mr. Trump's presidency could affect Caterpillar's fortunes. The president has called for increased spending on U.S. infrastructure, as well as sweeping changes to tax and trade policies.

Joshua Jamerson contributed to this article.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

January 26, 2017 12:00 ET (17:00 GMT)

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