Caterpillar posted profit per share in the fourth quarter of $1.54 per share, topping analysts’ expectations and nearly 50-percent higher than $1.04 per share in the fourth quarter of 2012. Sales and revenue declined 10 percent, from $16.075 billion in the fourth quarter of 2012 to $14.4 billion in the recently concluded quarter.

Sales and revenue for full year 2013 were $55.656 billion, a 16-percent decline compared to $65.875 billion in 2012. The decline in sales and revenues was primarily driven by a sharp drop in sales of new machines for mining. Profit per share in 2013 was $5.75, down from $8.48 in 2012.

Despite the challenging environment, Caterpillar reported record Machinery & Power Systems operating cash flow of $9 billion in 2013.

“In such a challenging environment, I am proud of the way our employees came together in 2013,” said Caterpillar chairman and CEO Doug Oberhelman. “Despite a sales and revenues decline of about $10 billion, we set a record for operating cash flow, strengthened our balance sheet and improved our overall market positions for machines. We continued to improve safety in our facilities and the quality of the products we ship each day.

“Cost flexibility is critical to our strategy and was a significant focus in 2013 as we took substantial actions to help maintain profitability as sales declined. Excluding the impact of cost absorption our manufacturing costs and SG&A and R&D expenses were favorable by $1.2 billion compared with 2012. It wasn’t easy, especially for our employees who endured an incredibly tough year, but the actions we initiated helped us deliver strong operational performance in 2013.”

Oberhelman said sales in Caterpillar’s Construction Industries and Power Systems segments did not decline as much as in 2013. The company also had a strong year in its Financial Products segment, which delivered a record profit in 2013.

“Our balance sheet ended the year stronger than it began with our debt-to-capital ratio dropping about eight points to 29.7 percent,” Oberhelman added. “This was the lowest debt-to-capital ratio in more than 25 years.”

Oberhelman said Caterpillar improved its market position for machines during the past three years, with particularly strong gains with excavators in China. Total sales and revenues in China in 2013 were about $3.5 billion, an increase of more than 20 percent from 2012.

Looking ahead, Oberhelman said the company expects sales and revenues in 2014 to be similar to 2013, about $56 billion in a range of plus or minus 5 percent.

“We see some signs of improvement in the world economy, which should be positive for sales in our Construction Industries and Power Systems segments,” he said. “However, despite our expectation that mine production will continue to increase, we expect mining companies to further reduce their capital expenditures in 2014. As a result, we’re expecting sales in Resource Industries to decline modestly. We’ve already taken a number of restructuring actions to help improve our financial results and expect to take additional actions in 2014. We continue to be cautious and are making the tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound.”