Cat Update: Earnings Update, New Chicago Global Headquarters

Caterpillar announced its fourth-quarter and year-end earnings on Monday.

Here is a Reuters story. From it …

“While we see signs of positive activity in some of our key end markets, the overall economic environment remains challenging,” Chief Executive Jim Umpleby said in a statement on Thursday.

Caterpillar cut 12,300 jobs in 2016, including 7,700 in the United States. It said it was considering closing two more major production facilities, including one in Aurora, Illinois.

The company said a glut of used construction equipment in North America would continue to hurt sales in 2017, while sales in Africa and the Middle East would remain soft due to the regions’ reliance on oil revenue. Low traffic volume in its rail business and a significant number of idle locomotives were weighing on its transportation business, while weakness in shipbuilding would hurt marine-related sales, the company said.

The company’s loss ballooned to $1.17 billion, or $2.00 per share, in the fourth quarter ended Dec. 31, from $94 million, or 16 cents per share, a year earlier.

But the company posted an adjusted fourth-quarter profit of 83 cents per share, which excludes $1.019 billion in restructuring costs as well as other charges. That topped analysts’ average estimate of 66 cents.

Here is Chicago Tribune coverage.

On Tuesday, Cat also announced its plans to move its global headquarters from Peoria to the Chicago area. Here is a Chicago Tribune story. From it …

Since 2012, about two-thirds of Caterpillar’s sales have come from outside the United States.

“Locating our headquarters closer to a global transportation hub, such as Chicago, means we can meet with our global customers, dealers and employees more easily and frequently,” he said.

“A limited number” of senior executives will move into leased office space beginning this year, and, eventually, Caterpillar expects about 300 workers to be based in the Chicago area, including some positions moved from Peoria.

Caterpillar spokeswoman Rachel Potts said the company hasn’t yet decided whether the new headquarters will be in the city of Chicago or in the suburbs. She also said that Caterpillar hasn’t yet had any discussions with government leaders about incentives.

“We’ll see where the site selection takes us,” she said when asked about incentives.

Here is the Cat press release on the HQ move.

 

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