Caterpillar put a lid on costs in the fourth quarter, pushing profits higher despite an 8% decline in revenue.
The strong profits, however, were overshadowed by an uncertain take on the year ahead with global growth slowing.
Shares slipped $1.06 to $134.31 in early trading Friday.
Net income rose 5% to $1.1 billion, or $1.97 per share, in the quarter ended in December, the manufacturer said Friday. Adjusted income totaled $2.63 per share, in line with Wall Street expectations, according to a survey by FactSet.
Sales declined to $13.14 billion, reflecting slower activity in North and Latin America along with Europe, Africa and the Middle East.
For 2020, the Deerfield, Illinois, company expects to earn $8.50 to $10 per share, shy of the $10.60 that industry analysts were looking for.
“We expect continued global economic uncertainty to pressure sales to users in 2020 and cause dealers to further reduce inventories,” said CEO and Chairman Jim Umpleby. “We have improved our lead times and remain prepared to respond quickly to any positive or negative changes in customer demand."
Earlier this month the Institute for Supply Management, an association of purchasing managers, said that its manufacturing index dropped to 47.2 in December, from 48.1 in November. That's the lowest level since June 2009, when the U.S. economy was at the tail end of the Great Recession. Any reading below 50 signals contraction — and the index has been below that crucial level since August.
The manufacturing sector was rocked last year by slower global growth and the escalation of trade tensions between the United States and China.