Caterpillar, the world's largest construction and equipment maker, forecast 2017 profit sharply below analysts' estimates, hurt by sluggish demand in the construction and energy industries.
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The company said it expected an adjusted profit of about $2.90 per share for the full year, compared with analysts' average estimate of $3.04, according to Thomson Reuters I/B/E/S.
"While we see signs of positive activity in some of our key end markets, the overall economic environment remains challenging," Chief Executive Jim Umpleby said in a statement on Thursday.
The company reported a much better-than-expected fourth-quarter adjusted profit as it kept a tight lid on costs.
The company said a glut of used construction equipment in North America would continue to hurt sales in 2017, while sales in Africa and the Middle East would remain soft due to the regions' reliance on oil revenue.
Caterpillar also said its low traffic volume in its rail business and a significant number of idle locomotives were weighing on its transportation business, while weakness in shipbuilding would hurt marine-related sales.
The company's loss ballooned to $1.17 billion, or $2.00 per share, in the fourth quarter ended Dec. 31, from $94 million, or 16 cents per share, a year earlier.
The company posted an adjusted fourth-quarter profit of 83 cents per share, ahead of analysts' average estimate of 66 cents.
Net sales fell 13.2 percent to $9.57 billion.
Caterpillar's shares were down 1.2 percent at $96.96 in premarket trading on Thursday.
Up to Wednesday's close, the stock had risen about 16 percent since Donald Trump's victory in the U.S presidential election.
(Reporting by Rachit Vats in Bengaluru; Editing by Sriraj Kalluvila)