Caterpillar Incs (CAT) fourth-quarter earnings and full-year 2019 earnings forecast fell short of Wall Street estimates on Monday as a slowdown in the companys construction business in China weighed on results.
Caterpillar shares closed lower for the sixth time in the past eleven trading sessions in New York on Monday. It has also been the steepest daily loss since August 8th 2011. The stock went down 9.13% ($12.49) to $124.37, after touching an intraday low at $122.98, or a price level not seen since January 3rd ($120.44).
Shares of Caterpillar Inc have retreated 2.12% so far in 2019 compared with a 5.47% gain for the benchmark index, S&P 500 (SPX).
In 2018, Caterpillar’s stock went down 19.36%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.
Total revenue went up 11% year-on-year to $14.34 billion during the fourth quarter, which compares with a median analyst estimate of $14.33 billion.
“Our outlook assumes a modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment,” Jim Umpleby, Caterpillars Chairman and Chief Executive Officer, said in a statement, cited by CNBC.
“We will continue to focus on operational excellence, including cost discipline, while investing in expanded offerings and services to drive long-term profitable growth,” Umpleby added.
Caterpillars revenue grew across all of its regional businesses during the latest quarter, as the largest growth rate was registered in North America. However, sales in its construction business in the Asia-Pacific region dropped “due to lower demand in China, partially offset by higher demand in a few other countries in the region.” According to the heavy equipment maker, Asia-Pacific sales were also affected by “unfavorable currency impacts”.
Meanwhile, Caterpillars earnings were reported at $2.55 per share during the fourth quarter, up from $2.16 per share in the year-ago period, when it incurred a $2.4 billion charge associated with the US tax code reform. On the other hand, the latest figure fell well short of a consensus of estimates pointing to earnings of $2.99 per share.
The construction and mining equipment manufacturer now forecasts full-year 2019 adjusted earnings within the range of $11.75 to $12.75 per share, while the median forecast by analysts points to adjusted earnings of $12.73 per share.
According to CNN Money, the 24 analysts, offering 12-month forecasts regarding Caterpillar Inc’s stock price, have a median target of $160.00, with a high estimate of $193.00 and a low estimate of $105.00. The median estimate represents a 28.65% upside compared to the closing price of $124.37 on January 28th.
The same media also reported that 15 out of 28 surveyed investment analysts had rated Caterpillar Inc’s stock as “Buy”, while 8 – as “Hold”. On the other hand, 2 analysts had recommended selling the stock.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for Caterpillar Inc (CAT) are presented as follows:
Central Pivot Point – $134.63
R1 – $139.12
R2 – $141.37
R3 – $145.86
R4 – $150.34
S1 – $132.38
S2 – $127.89
S3 – $125.64
S4 – $123.38
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