Caterpillar shares drop on cautious 2019 sales outlook in China
The industrial giant expects flat sales in China, a significant shift from the strong growth of the past two years
New York — Caterpillar shares plunged nearly 10% Monday after the industrial giant offered a cautious 2019 profit outlook following weaker-than-expected fourth-quarter earnings. The company, which has been seen as vulnerable to a slowing Chinese economy, reported profit of $1bn, an improvement from the $1.3bn loss in the prior year due to one-time costs connected to tax reform. Revenues rose 11.2% to $14.3bn. Caterpillar, which makes heavy machinery for the energy, construction and mining industry, scored higher sales in all three of its main business areas, and cited good demand growth in several key areas, including oil and gas, power generation, mining and heavy construction. Executives also described economic conditions in North America as “strong”. But officials told an analyst conference call they expect flat sales in China in 2019, a significant shift from the strong growth of the past two years. “Within China, the industry is very dynamic and there are a variety of forecasts...
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