Caterpillar (CAT) said during its most recent earnings report that it had generated more than a quarter of its sales from Asia in the third quarter.
The company actually cited improved demand from China.
But with the Chinese economy losing momentum in recent months, concerns are growing that companies with big exposure to the world's most populous nation will be hurt.
Apple (AAPL) has already warned about weaker iPhone sales in China. Tire maker Goodyear (GT) and FedEx (FDX) have also said that softness in China was hurting their profits.
China has spent a lot on infrastructure over the past few years. If those investments slow, Caterpillar could find itself selling fewer bulldozers, excavators and tractors this year.
The continued drama surrounding trade talks between the United States and China could also complicate matters for Caterpillar.
Caterpillar said in October that the impact from tariffs on steel and other materials was about $40 million in the third quarter and that it expected tariffs to cost it between $100 million and $200 million for the full year.
It looks like former Caterpillar CFO Brad Halverson might have been right when he said that early 2018 would likely be the "high water mark" for the company.
Analysts have cut their profit forecasts over the past few months. Caterpillar is now expected to post earnings growth of just 9% in 2019, compared with the nearly 70% growth its likely to report for all of 2018.
That's a big reason why Caterpillar's stock is down more than 20% in the past year and has lagged the broader market.
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