Caterpillar's Q2 Results Top Off A Great July For The Stock

Caterpillar Inc. CAT announced a 29 percent drop in earnings for the second quarter, hurt by a 16 percent fall in the top line. Its adjusted earnings also dipped 22 percent. However, its adjusted earnings and revenue were more than the Street estimations. The company also provided an upbeat adjusted profit forecast for the current year.

Caterpillar reported $0.93 a share for the second quarter, down from $1.31 a share in the prior year quarter. Excluding special items, its earnings would have been $1.09 a share compared to $1.40 a share in the year-ago quarter. This was better than $0.96 a share predicted by the Street analysts.

The company's revenue dipped 16 percent to $10.3 billion from $12.3 billion in the corresponding period of the last year. However, this was ahead of the analysts expectations of $10.06 billion.

Chairman and CEO, Dough Oberhelman, stated, "In what is likely to be our fourth down year for sales and revenues, we're proud of what we're accomplishing – our machine market position has increased, including in China, product quality continues to be at high levels, and the safety in our facilities is world class." He added, "Despite a solid second quarter, we're cautious as we enter the second half of the year. We're not expecting an upturn in important industries like mining, oil and gas and rail to happen this year."

Going forward, Caterpillar expects adjusted profit of $3.70 a share on revenues of $40-$42 billion for the current year. Street analysts expect the company to deliver earnings of $3.52 a share on revenue of $40.17 billion.

However, the stock shed nearly 1 percent in pre-market trading.