Profits at Caterpillar (CAT), the world’s largest maker of bulldozers and excavators, fell 66%, but still crushed expectations as cost cutting offset a disappointing 41% slide in revenues.
Yesterday, shares advanced 7.83% on an analyst upgrade that called a bottom for the construction market. The analyst predicted Caterpillar’s second-quarter results would mark the bottom for the company’s machinery unit and the engine segment will stabilize in the second half of 2009.
Today, shares are marching higher on optimism from management and upside guidance. CEO Jim Owens sees “signs of stabilization” as stimulus programs and improved credit markets helped stabilize demand.
The company raised its full-year forecast to $1.15 to $2.25 a share, above analysts’ average estimate of $1.12. Sales will be from $32 billion to $36 billion for the year, in line with the average estimate of $34.8 billion.
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Peter J. Lazaroff
Tuesday, July 21, 2009
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