What Weighed on Caterpillar’s Q2 Results
Caterpillar shares tumbled after it reported its most recent quarterly results before the markets opened on Wednesday.
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Caterpillar Inc. (NYSE: CAT | CAT Price Prediction) reported its most recent quarterly results before the markets opened on Wednesday. The company said that it had $2.83 in earnings per share (EPS) and $14.4 billion in revenue, which compares with consensus estimates of $3.12 in EPS and $14.44 billion in revenue. The second quarter of last year reportedly had EPS of $2.97 on $14.01 billion in revenue.
Revenue growth this past quarter was due primarily to favorable price realization and higher sales volume driven by improved demand for equipment, including a favorable impact from changes in dealer inventories. The increase was partially offset by unfavorable currency impacts.
Sales increased in the Construction Industries and Resource Industries units, while Energy & Transportation sales decreased. Sales increased in North America and Latin America, partially offset by decreases in Asia/Pacific and EAME.
Looking ahead to the 2019 full year, the company expects modest sales growth, as well as EPS in the range of $12.06 to $13.06. Consensus estimates call for $12.24 in EPS and $56.54 billion in revenue for the year.
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Jim Umpleby, Caterpillar’s board chair and chief executive, commented:
Sales and revenues increased this quarter, including a record performance from Construction Industries, which reflected our strong competitive position globally. Our strong operating cash flow in the quarter allowed us to repurchase shares and pay dividends of about $1.9 billion. This is in line with our intention to return substantially all free cash flow to shareholders.
Shares of Caterpillar traded down 4.5% early Wednesday at $131.92, in a 52-week range of $112.06 to $159.37. The consensus price target is $147.13.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
