ZCZC
BCN-11
US-INDUSTRIAL-EARNINGS-CATERPILLAR
Caterpillar profits up, says demand offsets tariffs hit
NEW YORK, Oct 23, 2018 (BSS/AFP) – Caterpillar reported a jump in third-
quarter earnings behind robust industrial demand and lower taxes on Tuesday,
and said strong economic conditions would more than offset the hit from
tariffs.
Net income was $1.7 billion, up 63 percent above the year-ago level.
Revenues were $13.5 billion, up 18.4 percent.
Sales rose in all three businesses of Caterpillar, which manufacturers
industrial equipment for the construction, resources and energy and
transportation industries.
But shares fell sharply in pre-market trading on worries that earnings
growth is slowing.
Caterpillar said strong order rates and robust pricing would more than
offset higher material and freight costs, including tariffs.
The hit from the tariffs on steel would be “at the low end” of the
previously given range of $100 to $200 million for all of 2018, the company
said.
Results topped analyst expectations for the third-quarter in terms of
earnings-per-share and sales, but the company’s full-year forecast range was
$11 to $12 per share, which was low considering that analysts have an average
price of $11.66 per share.
Some analysts have expressed concerns that US stocks could be vulnerable to
a pullback if the market concludes US companies have passed the period of
peak earnings growth due to the US tax cut signed into law by President
Donald Trump in late 2017.
Shares sank 6.9 percent to $119.80 in pre-market trading.
BSS/AFP/SR/1910 HRS