Caterpillar Inc. has reported an 18 percent drop in sales and revenues for all of 2016 at $38.5 billion, with a per share loss of $0.11 for the year. That compares to 2015, when the company reported full-year sales and revenue of $47.0 billion and a profit per share of $4.18.
The loss, Caterpillar says, is due to “three large non-cash charges and higher than expected restructuring costs.” The largest of these was mark-to-market losses, which for the fourth quarter amounted to $985 million. These charges are related to actuarial gains and losses (pension and other postemployment benefit plans) that are reported when incurred instead of being amortized over time. This is an accounting principle change Caterpillar began Jan. 1, 2016. Another of these non-cash items was a goodwill impairment charge of $595 million related to the company’s mining acquisitions.
Without these charges and restructuring costs, the company had an adjusted profit per share of $3.42 for 2016 ($2.8 billion), compared to $5.35 for 2015. This was better than the $3.25 Caterpillar had predicted. Fourth quarter adjusted profit per share came in at $0.83, the same as 2015.
Fourth quarter 2016 sales and revenue came in at $9.6 billion, a 13.2 percent decrease compared to the previous year, and resulting in a $2.00 loss per share or $1.35 billion. Restructuring costs for the quarter came to $395 million.
“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,” says Caterpillar CEO Jim Umpleby. “Our team did a great job in the quarter, as they have all year, aligning our cost structure with current demand while preserving capacity for the future. I’m confident we are focusing on the right areas: controlling costs, maintaining a strong balance sheet and investing in the key areas important to our future.”
Construction Industries sales for the fourth quarter reached $3.6 billion, a drop of 8 percent ($316 million) compared to the fourth quarter of 2015. In North America, sales were $1.6 billion (16 percent decrease); Latin America $264 million (11 percent decrease); Europe, Africa, Middle East (EAME) $624 million (34 percent decrease); and Asia/Pacific $1.1 billion (41 percent increase).
Operating profit for the segment actually increased by 88 percent in the fourth quarter to $334 million, compared to $178 million in the same period in 2015.
