What happened

Shares of industrial stalwart Caterpillar (NYSE:CAT) fell as much as 10% in early trading Monday before recovering (a bit) to close the day down 9.1%.

Caterpillar reported Q4 sales just short of expectations, $14.34 billion versus Wall Street's hoped-for $14.37 billion. Cat's earnings miss, on the other hand, was quite a bit bigger. The mining and equipment maker said it earned only $2.55 per share, pro forma, and $1.78 per share, GAAP.

Wall Street had expected $2.98.

An industrial excavator with a man standing next to it.

Investors didn't exactly "dig" Caterpillar's earnings miss today. Image source: Getty Images.

So what

If that sounds bad, well, it gets worse.

You see, objectively speaking, Caterpillar's Q4 (and full-year 2018) results weren't at all terrible. Q4 sales grew 11% year over year and full-year sales were up 20%. Profit-wise, granted, Caterpillar didn't earn as much as Wall Street wanted it to. But one year ago, Cat's Q4 2017 profits were negative. Compared to that, Q4 2018's $1.78 per share in GAAP profit looked pretty good -- and full-year profits shot up from $1.26 in 2017 to $10.26 in 2018, an eightfold increase!

Now what

Problem is, that run of amazing earnings growth Cat posted in 2018 appears to be coming to an end. Caterpillar warned that after growing 20% in 2018, sales growth will only be "modest" in 2019 -- basically confirming Wall Street expectations, which has Caterpillar down for just 6.5% growth in the new year.

Earnings-wise, Cat says per-share profits will come in between $11.75 and $12.75 this year -- thus $12.25 at the midpoint. Wall Street, however, is looking for Caterpillar to report $12.64 per share.

Now it looks like Caterpillar will miss that estimate -- just as it missed estimates in Q4. Earnings may grow 19% this year, but if Wall Street is telling investors to expect more, then they're bound to be disappointed -- and sell off Caterpillar stock once again.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.