Caterpillar's Warning Moves Industrial Stocks

Loading...
Loading...

Shares of Caterpillar Inc. CAT spiked down and were halted mid-day following the release of an 8-K containing the company’s slideshow presentation to be presented at the Credit Suisse Industrials Conference.

The slides detail that, while Caterpillar anticipates over $2 billion in cost reductions during 2016 and a consensus 2017 revenue estimate of $38 billion as a “reasonable midpoint,” it sees fiscal year 2017 EPS of $3.25 as “too optimistic considering expected headwinds."

The company listed three significant operating headwinds:

  • Sales of $38 billion is $1 billion lower than 2016 outlook (variable margin headwind of $350 to $450 million)
  • Short-term incentive compensation for 2017 at $500 to $600 million higher than 2016
  • Cat financial unfavorable ~100 million”

Following the news, other industrials spiked lower in sympathy before gaining back, such as Terex Corporation TEX, Deere & Company DE, AGCO Corporation AGCO, CNH Industrial NV CNHI and Cummins Inc. CMI.

Posted In: NewsGuidanceManagementMovers
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...