- Caterpillar (NYSE:CAT) fell 1.7% in today's trade after posting a Q3 earnings beat but cutting its sales forecast for a fourth time and warning of continued weakness next year as miners and builders defer orders amid sluggish growth and low commodity prices.
- CAT cautiously points to potentially optimistic signs for 2017 - commodity prices are off their lows, there are signs of improvement in the Chinese construction market, and construction sales in Russia and Brazil may be bottoming - but it also predicts construction activity and equipment sales in North America will continue falling short of predictions, and notes continued uncertainty in Europe in the wake of the U.K.’s Brexit vote.
- CAT's $0.85 in EPS and $9.16B in revenues for Q3 represent a significant Y/Y decline from a respective $1.05 and $10.96B, yet the stock has made significant gains over the last 12 months, suggesting the market is betting on conditions improving soon for the company even as the lower guidance indicates that is not going to happen, Martin Tillier writes.