Caterpillar on Thursday reported adjusted fourth-quarter earnings that beat estimates, but revenue fell short of Wall Street expectations.
Shares of Caterpillar gained more than 3½ percent in premarket trading immediately following the earnings announcement. (Get the latest quote here.)
Looking ahead, Caterpillar Chairman and CEO Doug Oberhelman said: "2016 is going to be rough and challenging again."
Caterpillar does a lot of business in China, which has been building up infrastructure. In an interview on CNBC's "Squawk Box," Oberhelman said he sees long-term opportunity there but short-term pain. "Our numbers are down 30 percent-plus year over year [in China.]"
"[There's] a lot of oversupply from construction equipment," he continued. "But they're still pouring concrete and doing lots of things. Once that imbalance works out, it should be a pretty nice market."
But China's economy is showing signs of slowing — a trend that's knocked financial markets for a loop in the new year on concerns about whether the U.S. recovery could also get derailed.
Oberhelman said he sees no inflation in the U.S. and anemic growth of "1 percent or so — maybe up to 2 [percent]."
He said he was pleased to see the Federal Reserve hold steady on interest rates. "I just don't see the need for much more increase [in rates] if any at all."
The Fed's policy statement, released Wednesday afternoon following its January meeting, highlighted potential economic weakness but did not take a possible March interest rate hike off the table.