NEW YORK (AP) — Caterpillar used a combination of cost-cutting and strong sales of construction equipment to deliver a fourth-quarter profit that topped Wall Street estimates and gave the sagging stock market some needed support.
The Peoria, Ill., company has been buffeted by a sharp downturn in the global mining industry. Sales of mining equipment plunged 48 percent in the fourth quarter and profit in the mining business dropped 77 percent. As sales of large tractors and mining loaders slumped last year, Caterpillar shut plants and cut jobs. Those moves helped slash overall operating costs by $2 billion in the fourth quarter.
Strong results in construction and power systems also made up for the shortfall in mining. The construction business posted an operating profit of $500 million in the quarter, compared with just $26 million in the same quarter a year ago, aided by increased spending in the U.S. And Caterpillar’s profit from industrial engines and power generators rose 38 percent to $964 million.