Caterpillar Inc. reported that fourth-quarter sales and revenues were down 10 percent from 2012, but that profit-per-share beat expectations by rising from $1.04 in the fourth quarter of 2012 to $1.54 in 2013, largely because of the company’s machinery and power systems segment.
Sales and revenues were $14.4 billion, down from $16.1 billion in 2012, although fourth-quarter profits were up at $1 billion from $697 million in the fourth quarter of 2012.
Revenue for the full year was down 16 percent to $55.7 billion from $65.9 billion in 2012, driven largely by a worse-than-expected slump in mining. That decline was somewhat offset by a record $9 billion in operating cash flow in machinery and power systems, the category that includes marine engines, as well as substantial cost cuts.
“In such a challenging environment, I am proud of the way our employees came together in 2013. Despite a sales and revenues decline of about $10 billion, we set a record for operating cash flow, strengthened our balance sheet and improved our overall market position for machines. We continued to improve safety in our facilities and the quality of the products we ship each day,” Caterpillar chairman and CEO Doug Oberhelman said in a statement.
The company’s largest segment, power systems, delivered profits near their 2012 record despite lower sales. Caterpillar also said it had a strong year in its financial products segment, which delivered a record profit.
The company acknowledged that 2013 was a “very difficult year for Caterpillar,” during which the company lowered revenue estimates by about $3 billion.
Caterpillar said 2014 sales will be flat to slightly above previous guidance because of what it sees as growing opportunities in emerging markets.
“We see some signs of improvement in the world economy, which should be positive for sales in our construction industries and power systems segments. … We’ve already taken a number of restructuring actions to help improve our financial results and expect to take additional actions in 2014. We continue to be cautious and are making the tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound,” Oberholman said.