Caterpillar profit, forecast fall short of estimates; shares tumble

[January 28, 2019]  (Reuters) - Caterpillar Inc fell short of analysts' estimates for both fourth-quarter profit and its full-year 2019 outlook on Monday, sending its shares down 5 percent as it suffered from a slowdown in construction business in China.

Caterpillar Inc. equipment is on display for sale at a retail site in San Diego, California, U.S., March 3, 2017. REUTERS/Mike Blake/File Photo

The miss for one of Wall Street's stronger performing shares of recent times also knocked U.S. stock futures lower.

On its October earnings call, Caterpillar tried to ease investor worries about a slowdown in China and global demand, but since then a host of companies, including Apple Inc and FedEx Corp, have warned about the hit from a cooling Chinese economy.

In the fourth quarter, Caterpillar said revenue increased across all of its regional businesses, with the largest increase in North America, its biggest market by value.

But sales in the construction business in Asia-Pacific declined due to lower demand in China.

The International Monetary Fund last week cut its global growth outlook for the second time in three months while China confirmed that growth last year was the slowest in 28 years, as a bruising trade war with the United States hit manufacturers.

The company reported profit of $2.55 per share, well below analysts' average estimate of $2.99, according to IBES data from Refinitiv.

The heavy equipment maker took a $2.4 billion charge related to the U.S. tax overhaul in the same quarter a year ago.

Total sales and revenue rose 11 percent to $14.34 billion.

The company forecast 2019 adjusted profit of $11.75 to $12.75 per share, compared with analysts' average estimate of $12.73, according to IBES data from Refinitiv.

(Reporting by Rachit Vats in Bengaluru and Rajesh Kumar Singh in Chicago; Editing by Sriraj Kalluvila)

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