CATERPILLAR: 'World economic growth remains subdued'
Construction equipment giant Caterpillar (CAT) reported second quarter financial results that exceeded expectations.
Revenue came in at $10.34 billion, which was stronger than the $10.11 billion expected by analysts. Earnings adjusted for non-recurring items came in at $1.09 per share, beating expectations for $0.96 per share.
“I’m pleased with our financial performance and focus on our long-term strategy given the difficult economic and industry environment we’re facing,” CEO Doug Oberhelman said. “Together with our dealers, we’re having success managing through the downturn in industries like mining and oil and gas, and in sluggish economic conditions in much of the developing world.”
Caterpillar is a global supplier of construction and mining equipment, which makes it a pretty good bellwether of economic activity.
Economic growth remains subdued and global uncertainty continues
“World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets we serve,” management said. “Commodity prices appear to have stabilized, but at low levels. Global uncertainty continues, and the recent Brexit outcome and the turmoil in Turkey add to risks, especially in Europe.”
“Despite a solid second quarter, we’re cautious as we enter the second half of the year,” Oberhelman said. “We’re not expecting an upturn in important industries like mining, oil and gas and rail to happen this year.”
With that, management expects to deliver full-year revenue of $40.0 to $40.5 billion, which compares to the prior range of $40.0 to $42.0 billion. Earnings are expected to come in at about $3.55 per share, which excludes approximately $0.80 in restructuring costs.
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Sam Ro is managing editor at Yahoo Finance.
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