The company also issued a future guidance band that fell short of Wall Street's bottom-line earnings expectations. The company expects earnings per share for December 2019 to be between $ 11.75 and $ 12.75 against FactSet's consensual expectations of $ 12.73.
The shares fell more than 5.5% in Monday's trading session. Dow Jones Industrial Average futures fell to new lows after Caterpillar comments.
"Our outlook assumes a modest increase in sales based on the fundamentals of our various end markets as well as the macroeconomic and geopolitical environment," Caterpillar Chairman and CEO Jim Umpleby said in the press release. "We will continue to focus on operational excellence, including cost discipline, while investing in expanded offerings and services to drive long-term profitable growth."
The role of the Illinois-based company as a global manufacturing leader may result in large swings in key US stock indices. For example, when Financial Vice President Brad Halverson said last April that the company's first quarter adjusted earnings per share would be the "high point," Caterpillar shares sank 6.2 percent and helped reduce the Dow to more of 400 points.
The stock plummeted its worst session since 2011 on Oct. 23 after reporting its third-quarter profit that its costs were rising because of the US-China trade war.
"Manufacturing costs were higher due to higher material and freight costs, with material costs higher due mainly to increases in steel prices and tariffs," the company said. "Freight costs have been unfavorable mainly due to supply chain inefficiencies as the industry continues to respond to strong global demand."
The company said at the time that it expected the 2018 impact of newly imposed tariffs to fall in the lowest range of $ 100 million to $ 200 million.
Caterpillar reported that total sales of the Construction Industries segment were $ 5.705 billion in the fourth quarter of 2018, an increase of 7.7% over the same period last year. The company reported total sales of $ 14.3 billion in the fourth quarter and $ 54.7 billion year-round; earnings per share of $ 2.55 were well below expectations of $ 2.99 per share.
Caterpillar will have a winning call at 11:00 am when the company's management will detail its results and the outlook for 2019. It will also put questions from Wall Street analysts.