New York, N.Y. -- As the stock market opens for the first time in 2014 Thursday, Caterpillar, Inc. is coming off a year in which stocks were among the five worst-performing of the 30 U.S. companies in the Dow Jones Industrial Average (DJIA).
Overall, the DJIA was up 26 percent last year, but Caterpillar, Inc. shares returned less than four percent. The decline in mining and subsequent decline in demand for mining equipment caused last quarter sales in Caterpillar's resource industries sector to fall in every geographic region. Sales in Caterpillar's construction and power sectors dropped in each geographic region except in Latin America. In October, Caterpillar, Inc. cut sales and earnings predictions for 2013.
According to 24/7 Wall Street, as of Tuesday afternoon, Caterpillar's total return was 3.48 percent. Share price was $90.87, though at market close on Tuesday it was at $90.81. That price is down from a 52-week high ofnearly $100. The price to earnings ratio was 17.3, and the dividend yield was 2.6 percent
Caterpillar was the second worst-performing DJIA stock in 2013. IBM was the worst with a total return of -1.5 and price of $186.41. AT&T was third with a total return of 9.8 percent. McDonald's was fourth with 13.45 percent, and Cisco Systems was fifth at 14.57 percent.
The reasons for the low returns vary, but Caterpillar, Inc. has been struggling from the decline in mining and sharp reduction in dealer inventory. In July, Caterpillar announced cost-cutting measures that could affect the $426 million plant in Kernersville. Earnings had fallen 43 percent and revenue by almost 16 percent.
Caterpillar has said it will close a Summerfield, S.C. manufacturing plant this year, which would affect 300 employees and cause possible layoffs of approximately 60. Just this past month, Caterpillar announced it has submitted a restructuring plan for a plant in Belgium, which could cause an undisclosed number of job cuts.
Depite the tough year economically, Caterpillar did recently receive some potentially positive news. The Export-Import Bank of the U.S. has agreed to finance an Australian mining deal. In return, the Australian company would have to comply with buying equipment from U.S. companies, including Caterpillar.
WFMY News 2