Caterpillar shares tank after company cuts forecast again, earnings badly miss the Street

FAN Editor

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Shares of Caterpillar plunged on Wednesday after the company slashed its full-year outlook and posted disappointing third-quarter results.

The company blamed the dismal results, in a press release, on a reduction in inventories from dealers. Executives said this weakness could persist due to “global economic uncertainty.” 

The heavy machinery manufacturer earned $2.66 per share in the third quarter, versus the consensus estimate of $2.88 per share, according to Refinitiv. Revenue came in at $12.758 billion, while Wall Street expected revenue of $13.572 billion. 

“Our volumes declined as dealers reduced their inventories, and end-user demand, while positive, was lower than our expectations,” said Caterpillar Chairman and CEO Jim Umpleby. 

The company also lowered its full-year earnings per share forecast to a range of $10.59 and $11.09, below the expected $11.70. 

Shares of Caterpillar fell nearly 5% in premarket trading on Wednesday. 

Caterpillar’s sales in Asia-Pacific declined in the third quarter mainly because of the lower demand in China, the company said.

Shares of Caterpillar are underforming the market this year. The stock is up 5% since January, compared to the S&P 500, which is up nearly 20%. 

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