Caterpillar posted sales and revenue in the fourth quarter of 2016 of $9.6 billion compared to $11 billion in the fourth quarter of 2015, a 12.7-percent slide. Sales and revenue for the full year 2016 plunged 18 percent from $47 billion in 2015 to $38.5 billion in 2016.

Adjusted profit per share in the fourth quarter of 2016 was $0.83, same as Q415, although the number was higher than the outlook for profit per share excluding restructuring costs provided in October. Adjusted profit per share in 2016 was $3.42, down from $5.35 per share in 2015.

“Our results for the fourth quarter, while slightly better than expected, continued to reflect pressure in many of our end markets from weak economic conditions around much of the world,” said new Caterpillar CEO Jim Umpleby. “Our team did a great job in the quarter, as they have all year, aligning our cost structure with current demand while preserving capacity for the future. I’m confident we are focusing on the right areas: controlling costs, maintaining a strong balance sheet and investing in the key areas important to our future.

Caterpillar said it is seeing some early indications of modest recovery in several of its businesses. Commodity prices are at higher levels than a year ago, along with sequential improvements in parts sales in each of the last three quarters and improvements in quoting and order activity in the fourth quarter, suggesting that mining-related sales might have reached bottom.

In construction, sales in China began to recover in 2016, while sales in Europe seem to have stabilized and could improve some in 2017; and sales in Brazil, which are more than 80 percent down from their peak, might improve if the Brazilian economy begins to recover from recession.

In the energy and transportation space, gas compression remains strong and Caterpillar has a solid backlog for turbines. If oil prices rise modestly and stabilize, it would be positive for Caterpillar’s businesses that support drilling and well servicing.

The company said prospects for tax reform and an infrastructure spending bill in the United States are encouraging and would be a positive for many of Caterpillar’s businesses, but the company doesn’t expect to see meaningful effects of these changes until sometime in 2018.

On the other hand, while quoting interest in mining products has improved, Caterpillar is expecting miners’ capital spending to be about flat in 2017, after several years of decline. In construction, North America and EAME are regions with some concern. The availability of used equipment in North America has negatively impacted sales of new equipment, a trend likely to continue in 2017. It expects sales in Africa and the Middle East to continue to be down in 2017 because of economic weakness and dependence on oil revenue. Uncertainty caused by Brexit remains a concern in Europe.

Power generation sales are projected to remain weak and industrial engine sales to OEMs are expected to be lower in 2017.

The company’s expectations for sales and revenue in 2017 are slightly lower because of the strengthening of the U.S. dollar during the past two months. Caterpillar is expecting sales and revenue in the $36 billion to $39 billion range

“We continue to execute in a challenging economic environment and are focused on improving operating margins, profitability and shareholder returns,” added Umpleby. “While we see signs of positive activity in some of our key end markets, the overall economic environment remains challenging.”