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Caterpillar Q4 Profit Tops View, But Sales Miss

Caterpillar Inc. (CAT) reported that its fourth-quarter profit attributable to common shareholders rose to $1.10 billion or $1.97 per share from $1.05 billion or $1.78 per share in the same quarter last year.

The company expects 2020 profit to be in a range of $8.50 to $10.00 per share. Analysts expect annual earnings of $10.63 per share.

Adjusted profit per share for the fourth quarter of 2019 was $2.63, compared to $2.55 in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $2.37 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

"In the fourth quarter, strong cost control more than offset lower-than-expected end-user demand," said Jim Umpleby, Caterpillar Chairman and CEO.

Operating profit for the fourth quarter was $1.850 billion, a decrease of $33 million, or 2% from the previous year. The decrease was primarily due to lower sales volume, mostly offset by lower selling, general and administrative and research and development expenses and higher profit from Financial Products.

Sales and revenues for the fourth quarter were $13.14 billion, an 8% decrease from last year's $14.34 billion. The decline was due to lower sales volume driven by the impact from changes in dealer inventories and lower end-user demand, primarily in Construction Industries and Resource Industries. Analysts expected revenues of $13.41 billion.

Separately, Cat Financial reported that its fourth-quarter profit was $104 million, an $86 million, or 478%, increase from the fourth quarter of 2018.

Cat Financial's quarterly revenues were $725 million, an increase of $26 million, or 4% from the prior year.The increase in revenues was primarily due to a $23 million favorable impact from returned or repossessed equipment and a $20 million favorable impact from higher average financing rates, partially offset by a $10 million unfavorable impact from lower average earning assets and a $10 million unfavorable impact due to the termination of a committed credit facility with Caterpillar.

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