Fitch Ratings on Thursday revised the outlook on Caterpillar Inc.'s A rating to negative from stable, on concerns about the long downturn in the company's machinery markets. Caterpillar's sales have declined for eight straight quarters and the company has cautioned that forecasts for 2017 seem over-optimistic. Fitch said there is an "increased risk that the company could face challenges to rebuild its operating and financial performance to levels that support the current ratings." A slow recovery in demand could prevent the company from returning to stronger credit metrics and even if the recovery is strong, free cash flow could be constrained if the company fails to fully realize benefits from recent restructuring moves. The maker of diggers and dozers launched a restructuring program in 2015 that aims to cut costs by $1.5 billion annually. Caterpillar shares have gained almost 42% in the year so far, despite its weak performance. its most active bonds, the 1.700% notes due August 2021, were last quoted at 97 cents on the dollar, according to MarketAxess.
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