- Caterpillar (NYSE:CAT) touched 52-week highs in early trading but closed -1.1%, near lows of the day, after Fitch Ratings revised CAT's outlook to Negative from Stable on concerns about the extended downturn in the company's machinery markets.
- Fitch says CAT could face challenges in rebuilding its operating and financial performance, and that a slow recovery in demand could prevent the company from returning to stronger credit metrics; even if the recovery is strong, free cash flow could be constrained if CAT fails to fully realize benefits from recent restructuring moves.
- CAT launched a restructuring program in 2015 that aims to cut costs by $1.5B/year; shares have gained 42% YTD even as sales have declined for eight straight quarters and the company recently warned that 2017 forecasts seemed too optimistic.