Slower Housing Puts a Dent in Caterpillar [Business Week]
Summary: Catepillar saw its shares plummet by 12% on Friday, and the slow housing market is blamed for the company's decline, which many see as harbinger for a lean 2007. The construction and mining equipment manufacturer reported a third-quarter income of $769 million, or $1.14 a share, which was 21% higher than the previous year, but fell short of analyst estimates of $1.35. CAT's lackluster performance sent the Dow lower by 20 points to close at 11,991.40 following a record close at above 12,000 on Thursday. In addition to a sluggish housing market, Catepillar had to face an $80 million legal settlement with Navistar International, higher operating costs and lower sales volume in the third quarter. However, CEO Jim Owens expects higher sales and revenues in 2007 in spite of a slowing economy.
Potentially impacted stocks and ETFs: Catepillar (NYSE:CAT), Navistar International (NYSE:NAV) • Competitors: Deere (NYSE:DE), ABB Ltd. (NYSE:ABB), CNH Global NV (NYSE:CNH), Parker-Hannifin (NYSE:PH)
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