Caterpillar Inc. (NYSE: CAT) continues to struggle in its sales of heavy equipment. We have now seen the release of its fourth-quarter sales trends, and the trend is not Caterpillar’s friend. About the only good news is that the rate of decline in most instances was a lower one.

Industrial sales under the Power Systems unit was the only bright spot, but even then the Power Systems total sales were lower in December than in November. Caterpillar seems expensive considering the decline it has faced. After all, it is trading at 15 times expected 2014 earnings.

The reason that Caterpillar is not so expensive is that the 2013 expected earnings of $5.49 per share and 2014 expected earnings of $5.78 per share compare to $8.90 per share in 2012. The flat sales growth of 0.9% to $55.3 billion expected in 2014 is actually down from $65.9 billion in 2012. That means that when things do signal even the hint of a turn, Caterpillar suddenly could be trading at 10 times forward earnings. At that point, a massive rally can take place. Investors often have to pay up on today’s numbers if they want to catch a turnaround in the next year (or two).

Caterpillar shares are not liking the news, and another down day for the stock market is not helping matters. Shares were down 2.15 at $86.64 shortly after the market opened on Friday. The consensus price target is just shy of $93, and the 52-week trading range is $79.49 to $99.70.

As a reminder, Caterpillar’s stock peak was close to $115 back in early 2012. We have included the SEC filing charts to show how the declines are almost universal.

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