Caterpillar December Retail Sales Still Down, but Showing Gains

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Caterpillar Inc. (NYSE: CAT) closed out 2016 at $92.74, for a dividend-adjusted total return of 42% for the year. Just over half the gains were made in the second half of the year, and if you saw the earlier part of 2016, you might wonder how on earth Caterpillar ended up as the Dow’s top stock.

Share-price growth has continued since the beginning of the year, and Caterpillar’s shares are up more than 5% year to date. The stock posted a new high Wednesday morning following a more encouraging report on the company’s retail sales.

At the end of December, worldwide sales were down 12% year over year, but that’s an improvement from November’s decline of 17% for the prior 12 months and on a par with October’s decline of 12%. September sales were down 18%. Retail sales are reported on the basis of a 12-month rolling average by geographic region.

Sales in Caterpillar’s Asia-Pacific region rose 19% in December, with sales of construction equipment up 21% year over year. Asia-Pacific sales have been the only consistent growth area for the company.

Total sales in North America were down 14% in December, but that’s better than the 19% year-over-year decline in November and the 16% decline in October. Sales of mining equipment in North America was down just 4% compared with decline of 28% in November and 31% in October.

Mining equipment sales worldwide were down 10% year over year, again a big improvement from a 24% decline in both October and November. Mining equipment sales in Asia-Pacific rose 11% in December, compared with a 7% gain in November and an 8% gain in October.

Construction equipment sales worldwide were down 12% compared with a decline of 15% in November and 8% in October.

The stock traded up about 1.8% Wednesday morning, at $98.03 in a 52-week range of $57.46 to $98.59. The high was posted earlier in the morning. The consensus 12-month price target is $90.07.