Caterpillar Fourth Quarter and Full Year Revenues and Profits Drop in 2015
Caterpillar posted fourth quarter revenue of $11 billion compared to $14.2 billion in the fourth quarter of 2014, a 22.5-percent decrease. The company posted a loss of $0.15 per share, down from a profit of $1.23 per share in the fourth quarter of 2014. Excluding restructuring costs, profit per share was $0.74, compared with $1.35 in the year-ago quarter.
For the full year, sales and revenue slid 15 percent to $47.01 million, compared to $55.18 million in 2014. Revenues dropped 29 percent compared to the peak of 2012. The two most significant reasons for the decline from 2014 were weakening economic growth and much lower commodity prices. Weak economic growth was most pronounced in developing countries such as China and Brazil.
“Cost management, restructuring actions and operational execution are helping the company while sales and revenues remain under pressure from weak commodity prices and slowing economic growth in developing countries,” said Caterpillar chairman and CEO Doug Oberhelman. “We took tough but necessary restructuring actions in 2015, and they were significant. I am proud that our team stayed focused on our customers in this difficult environment. Our balance sheet is strong; our product quality remained at high levels; we gained market position for machines for the fifth year in a row, inventory levels have declined and are well positioned as we look forward to 2016, and our safety levels are world class. We are benefiting now and expect to even more in the future when markets rebound.”
Lower oil prices had a substantial negative impact on the portion of Caterpillar’s Energy & Transportation division that supports oil drilling and well servicing, where new order rates in 2015 were down close to 90 percent from 2014.
“We anticipated about $5 billion of the $8 billion sales and revenue decline in our January 2015 outlook as we started the year,” Oberhelman added. “Actual sales and revenues were about $3 billion below that $50 billion outlook because of steeper than expected declines in oil prices, a stronger U.S. dollar, weaker construction equipment sales and lower than expected mining-related sales in Resource Industries.”
Caterpillar said its outlook for 2016 sales and revenues does not anticipate improvement in world economic growth or commodity prices. The company expects sales and revenues in a range of $40 to $44 billion. The mid-point of the range reflects a decline of about $3.5 billion from last October’s preliminary outlook for 2016 sales and revenues and a year-over-year decline of about 10 percent, largely because of continued declines in commodity prices and economic weakness in developing countries.
Over the past few years, Caterpillar has undertaken restructuring activities designed to lower long-term cost structure, and the company plans additional restructuring activities in 2016.
“While we manage through these difficult economic times with substantial investments in R&D and our digital capabilities,” added Oberhelman. “These investments will be positive for Caterpillar and our customers through connected fleets and jobsites and access to data and predictive analytics.”
