February Sales Will Not Boost Caterpillar Appeal to Investors

Industrials

Published: March 19, 2015 10:15 am

Last Updated: April 27, 2020 9:14 pm

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When Caterpillar Inc. (NYSE: CAT) reported fourth-quarter 2014 earnings in January, the company noted that sales decreases in its construction industries and resource industries segments were “about offset” by sales increases in its energy and transportation business. Thursday morning, Caterpillar reported that energy and transportation retail sales for the three-month rolling period ending in February were up 17%, while construction and resources segments posted decreases of 11% and 12%, respectively. That performance likely will not improve the company’s overall first-quarter sales totals.

Thursday’s report showed a year-over-year decrease in resource industries segment sales in every geographic region except Asia/Pacific, which posted a gain of 37%. Sales in the Europe, Africa and Middle East (EAME) region were off 42%, and North American sales were down 7%.

Sales in the construction industries segment rose 5% in EAME but were down 40% in Latin America, 29% in Asia/Pacific and 1% in North America.

In the energy and transportation segment, sales of transportation products were up 39%, power generation sales rose 19%, oil and gas equipment sales rose 18% and industrial sales were down 16%.

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Investors are less than excited by Caterpillar’s performance. The stock is the third-worst performer among the 30 stocks that make up the Dow Jones Industrial Average, and it has lost more than 10% since the year began. Over the past 12 months, Caterpillar stock is the worst performing among the Dow 30, down more than 13%.

This latest data will not improve the stock’s performance either. Shares traded down about 1.6% at $80.02 in the first half hour Thursday morning. The stock’s 52-week range is $78.19 to $111.46, and the analysts’ consensus price target is $84.29.

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