DEERFIELD, Ill. (AP) — Caterpillar returned to profitability in the fourth quarter, but sales have begun to slow in China and earnings failed to measure up to expectations on Wall Street. Shares tumbled six percent before the opening bell, weighing heavily on the Dow Jones industrial average.
It's a meager start to what will be a very active week of corporate earnings, including other industrial companies that have put a lot of stake in China, where the economic growth rate has slowed to levels not seen in almost two decades. Slowing growth in the world's second-largest economy is being felt across almost every sector. Apple, Inc. said recently that iPhone sales are slipping in China, a rare warning from the tech giant that posts quarterly earnings Tuesday.
China's struggles are being made worse by trade tensions between Washington and Beijing.
Caterpillar earned $1.05 billion, or $1.78 per share. Stripping out restructuring costs and other items, earnings were $2.55 per share, which was 43 cents short of analyst expectations. Last year, the construction equipment company lost $1.3 billion in the quarter, or $2.18 per share, but at that time it was dragged down by an enormous charge related to tax reform.
Revenue climbed to $14.34 billion, $12.9 billion, led by increased sales in its resource industries segment.
Revenue for all of 2018 was $54.7 billion, up 20 percent from $45.5 billion in 2017. Profit for the year was $10.26 per share, compared $1.26 in 2017. Adjusted profit per share was $11.22, up 63 percent compared with 2017.
Caterpillar Inc., based in Deerfield, Illinois, anticipates 2019 earnings in a range of $11.75 to $12.75, roughly in line with expectations.