Caterpillar 4Q net sinks 33%
|
|
January 20, 1999: 12:14 p.m. ET
Construction gear maker cites lower margins and continued spending
|
NEW YORK (CNNfn) - Heavy equipment maker Caterpillar Inc. said Wednesday its fourth-quarter net income fell 33 percent from a year ago to $301 million as lower margins and continued spending for growth offset higher sales.
For the fourth quarter, Caterpillar's diluted earnings per share were 83 cents, down from $1.20 a year ago but equal to the First Call consensus estimate.
Sales and revenue for the quarter were $5.41 billion, up from $5.19 billion a year ago.
"Despite the serious economic downturn in Asia, 1998's record sales and solid profit performance reflect the strength and diversity of a growing product line . . . and continued impressive growth in the non-traditional areas of our business," Chairman and CEO Donald V. Fites said.
In particular, the company said a 37 percent increase in revenue from its financial services business helped make up for sluggish overseas markets.
Caterpillar warned investors in December that global economic conditions would contribute to "uncomfortably" slack profits.
Going forward, Caterpillar (CAT) said it expects 1999 profit to be moderately lower than 1998 because of expected sales decreases and a continuing competitive pricing environment.
In particular, the company said low prices for oil and metals, combined with an ambivalent world economic picture, will cut industrial demand for construction and mining equipment in 1999.
Furthermore, Caterpillar expects low prices for agricultural commodities to continue, depressing worldwide industrial demand for agricultural equipment.
For the year, Caterpillar reported record sales and revenue of $20.98 billion, up from $18.93 billion a year ago.
About $850 million of the increase came from the Perkins engine unit, which the company acquired in early 1998.
Net income for the year was $1.51 billion, down from $1.67 billion a year ago. Earnings per diluted share were $4.11, down from $4.37 a year ago.
On Wall Street, Caterpillar shares made some headway after a bumpy start, gaining 5/16 to 46-1/4 by mid-session.
-- from staff and wire reports
|
|
|
|
Caterpillar
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
|
|