Caterpillar on Friday reported a smaller than expected fall in quarterly earnings but refrained from providing 2021 guidance because of lingering pandemic-related business uncertainty.
The Illinois-based manufacturer of heavy machinery — a bellwether for economic activity — was hurt last year as uncertainty prompted customers to delay capital spending, hitting sales of bulldozers, mining trucks and other equipment.
The company reported adjusted profit of $2.12 per share, a 22% drop from a year ago. Analysts surveyed by Refinitiv on average expected earnings to decline about 30% to $1.49 per share.
Caterpillar's shares were up 0.8% at $185.9 in pre-market trade. The shares have gained 22% since late October on hopes that the worst is over for the company.
Strong government intervention worldwide and the rollout of Covid-19 vaccines in some countries have improved the outlook for the global economy, which posted the biggest peacetime contraction last year since the Great Depression.
Still, the International Monetary Fund this week warned that the world economy continued to face "exceptional uncertainty" amid new waves of Covid-19 infections and variants.
Caterpillar said while demand for construction and mining machines has improved, it still does not have clear visibility of how the business will pan out this year.
"The course of the year can change as we go through it, depending on how quickly vaccines get rolled out...how economic recovery occurs," Chief Financial Officer Andrew Bonfield told Reuters.
Caterpillar had pulled its guidance early in the pandemic.
The Illinois-based company did not say when it would restart buying back its shares. Share repurchases were suspended last year following the pandemic-induced business turmoil.