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Caterpillar 4Q results, 2014 outlook tops forecast

Published on NewsOK Modified: January 27, 2014 at 11:31 am •  Published: January 27, 2014

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.

Caterpillar's outlook for 2014 is also slightly better that what Wall Street is projecting. And the company's board approved a new $10 billion buyback.

That was all welcome news for investors. Caterpillar is one of the 30 stocks in the Dow Jones industrial average, so its 4 percent increase Monday helped limit losses in the benchmark index. The Dow can use the assist — it plunged nearly 500 points over Thursday and Friday. It was down 70 points, or 0.4 percent, at 15,809 in afternoon trading.

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