Caterpillar Halts Four-Year Sales Slump With Asia-Driven Rebound

(Bloomberg) -- Caterpillar Inc., the biggest maker of construction and mining equipment, reported its first increase in rolling retail machine sales since 2012, led by gains in the Asia-Pacific region.

Machine sales reported by dealers rose 1 percent in the three months through March from a year earlier, compared with a 1 percent drop in the quarter through February, the company said Monday in a filing. Caterpillar last had global retail machine sales growth in the three months through November 2012.

Caterpillar has reported declining annual sales since 2012 as a natural resources downturn damped demand for machines used in mining and energy. While its shares surged in 2016 by the most in six years, thanks in part to a bottoming of commodity markets and a promise by President Donald Trump to implement a $1 trillion spending package, the company and analysts remain cautious about the pace of global growth.

“It’s been getting a little bit better, or more accurately, a little less worse,” Stephen Volkmann, an analyst at Jefferies, said Monday by telephone. “What’s interesting is the resources are actually worse sequentially. Construction is clearly what’s driving the boat here, and energy and transport as well.”

Sales in Caterpillar’s resources segment dropped 19 percent from a year ago, below a Goldman Sachs Group Inc. estimate of no change for the first quarter of 2017. The construction segment rose 7 percent while energy and transport gained 1 percent.

Chief Executive Officer Jim Umpleby said in March that the company has seen “significant” improvement in China, while it remains cautious due to uncertainties over how long the nation’s pro-growth policies will stay in place. The company, which is planning to move its global headquarters from Peoria, Illinois, to the Chicago suburb of Deerfield, is currently under investigation by U.S. authorities over it’s offshore dealings.

Caterpillar jumped 2.6 percent to $96.79 at 10:56 a.m. in New York, bringing its gain in the past 12 months to 24 percent. The company is scheduled to report first-quarter earnings Tuesday at 7:30 a.m. New York time.

“CAT has been a monster stock, and so the world expects a massive beat and raise in the first quarter,” Volkmann said.

To contact the reporters on this story: Steven Frank in Toronto at sfrank9@bloomberg.net, Joe Deaux in New York at jdeaux@bloomberg.net.

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Joe Richter