Caterpillar posts stronger-than-expected fourth-quarter profit
Caterpillar posted a stronger-than-expected quarterly profit on Monday as the world's largest mining and construction equipment company aggressively cut costs to offset continued sluggish sales of its earth-moving equipment.
The results sent the company's shares up 6.1 percent to $91.40 in early electronic trading on the New York Stock Exchange.
In a statement, Doug Oberhelman, Caterpillar's chairman and chief executive officer, said the company was beginning to see "some signs of improvement in the world economy, which should be positive for sales" down the road.
Oberhelman's optimism extended to the emerging markets, a source of investors' concern in recent weeks. He said Caterpillar expects economic growth to pick up in 2014.
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Even so, he said the company expects its mining customers to continue to reduce their investments in new equipment in the coming year.
As a result, Oberhelman said Caterpillar would continue "to take additional actions in 2014" to cut costs. He characterized the moves as "tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound."
The Peoria, Ill.-based company, which also makes locomotives and diesel and turbine engines, reported a fourth-quarter profit of $1 billion, or $1.54 a share, up from $697 million, or $1.04 a share, in the fourth quarter of 2012.
Revenue fell 10 percent to $14.4 billion.
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Analysts, on average, expected Caterpillar to post a profit of $1.28 a share on sales of $13.6 billion, according to Thomson Reuters estimates.
After the earnings announcement, the construction equipment maker's shares rose 5 percent in premarket trading. (Click here to track its shares in premarket trade.)
Cost cuts were in focus as the world's largest maker of heavy earth-moving equipment reports its latest earnings figures before markets open on Monday. Unless the U.S. housing market rebounds faster than expected, analysts believe Caterpillar faces a tough year as its customers in the mining industry continue to ratchet back spending.
—By Reuters. CNBC contributed to this report.