Caterpillar 2018 Sales “Biggest Miss” in a Decade

Jan. 29, 2019

Caterpillar’s sales and revenues in Q4 of 2018 reached $14.3 billion, compared with $12.9 billion in 2017, an 11 percent increase. Full year sales and revenues were $54.7 billion, up 20 percent from $45.5 billion in 2017.

Bloomberg called the quarterly profit reports the “biggest miss” for the company in a decade. A Wall Street Journal report said Caterpillar expects sales of excavators to be “flat” this year in China, a sign of “faltering demand for some capital goods.”

Caterpillar also stated that problems in its financing unit cut into profit in the final quarter, and that it overestimated the value of recoverable assets from bad loans.

Similar to other companies, Cat raised prices to offset higher costs for fuel, labor, and materials. But still, the increases didn’t achieve the fourth quarter goal.

Finance chief Andrew Bonfield told the Wall Street Journal, “Material costs and freight were adverse and worse than we were expecting.”

Caterpillar plans on raising prices by between 1 percent and 4 percent in 2019 on most of its machines and engines to offset higher tariff costs.

Source: Caterpillar