CAT Caterpillar Inc

By Andrew Tangel 

Equipment giant Caterpillar Inc. said 2017 could bring the company's fifth-straight annual decline in revenue amid a protracted slump in commodities and global demand.

Caterpillar said analysts' consensus estimate of $38 billion in sales next year was a "reasonable midpoint." The world's largest maker of construction and mining equipment previously said revenue wouldn't be "significantly different" from the roughly $39 billion expected this year.

Wall Street estimates for profits of $3.25 per share next year excluding restructuring costs were "too optimistic considering expected headwinds, " Caterpillar said.

Caterpillar's stock was briefly halted in trading Thursday as investors reacted to the company's presentation at an analyst conference. But shares were up about 1% to $96.32 in Thursday afternoon trading.

Among looming concerns, the company cited volatile, low oil prices; weakness in North American demand for construction equipment; and sluggish European growth in the wake of the U.K.'s vote to leave the European Union.

Caterpillar executives flagged signs for optimism too.

An expected boost in infrastructure spending during Donald Trump's presidency could lift the company's fortunes as construction companies purchase heavy machines to build roads and bridges. So could a recovery in prices for commodities such as iron and copper.

But Amy Campbell, Caterpillar's director of investor relations, said the company doesn't expect much impact next year. "This has not yet translated into any tangible machine sale increases for Caterpillar," she said.

Caterpillar's sales performance has lagged in recent years as miners shelved equipment-buying plans as commodity prices fell. Oil prices also dropped, along with demand for related equipment.

Peoria, Ill.-based Caterpillar has been reducing its workforce and closing or consolidating plants around the world in recent years.

Ms. Johnson said Caterpillar has reduced its head count by more than 15,000 positions over the last two years. The company had 97,100 full-time employees at the end of the third quarter.

--Joshua Jamerson contributed to this article.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

December 01, 2016 16:41 ET (21:41 GMT)

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