Caterpillar Inc.’s (CAT - Free Report) February sales witnessed a meager dip of 1%, a welcome news for the beleaguered mining and construction equipment behemoth as it continues to grapple with weak mining demand and tax probes. Despite growth still lingering in the negative territory, this marked the company’s narrowest decline since Dec 2012. Consequently, Caterpillar’s shares gained 2.68% to close yesterday at $95.40 and were also the biggest price gainer within the Dow.
The reported dip of 1% in February sales is an improvement from the 8% drop witnessed in January sales as well as the 21% plunge suffered in February last year. On an average, sales had dipped 15% in 2016. In fact, the company’s sales growth has been in the red for an unprecedented stretch of 51 consecutive months with sales decline ranging from 1–21% as it continues to face low-end user demand due to economic weakness globally. This phase is further aggravated than the 19-month long stretch spanning from Oct 2008 to Apr 2010 wherein the company had suffered the same fate due to recession.
As per the company’s recent Feb 2017 sales report, overall performance was dragged down by a 21% slump in Latin America while sales continue to fall in North America and Europe, Africa and Middle East (EAME) with declines of 10% and 3%, respectively. Asia Pacific region remains the only bright spot, which saw an impressive rise of 39% in sales. The region has been exhibiting strength since Aug 2016 with the growth graph for machine retail sales steadily picking up steam from single digits to current levels of above 30%.
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