Earnings

Caterpillar stock plunged Monday after the company reported earnings that were sharply lower than expected.

The maker of heavy equipment cited tariffs as a factor in the fourth-quarter results. Its revenues exceeded expectations.

Here’s how the company did compared with what Wall Street expected:

  • Adjusted earnings: $2.55 per share vs. $2.99 per share expected by analysts surveyed by Refinitiv
  • Revenue: $14.34 billion vs. $14.33 billion as expected by analysts surveyed by Refinitiv

Caterpillar stock price skidded nearly 6 percent on the news.

Caterpillar’s guidance for 2019 profit was weaker than expected. It said it expects 2019 profit to increase to a range of $11.75 to $12.75 per share. Analysts had expected $12.73 per share.

“Our outlook assumes a modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment,” Chairman and CEO Jim Umpleby said in a statement. “We will continue to focus on operational excellence, including cost discipline, while investing in expanded offerings and services to drive long-term profitable growth.”

The company said sales in the Asia/Pacific region declined due to lower demand and unfavorable currency rates.

In December, Washington and Beijing agreed to a cease-fire in the trade war and promised to stop adding trade tariffs for 90 days. The countries have until March 2 to reach a resolution.

News of the truce prompted one major investment firm to upgrade Caterpillar shares in December.

Last quarter, Caterpillar’s stock fell 7.5 percent to its lowest levels since 2011 after the company issued disappointing 2018 guidance. The industrial giant said costs were rising due to tariffs and increases in steel prices.

Caterpillar said the impact of tariffs on material costs for the third quarter was $40 million.

The Illinois-based company told its dealers prices would rise by 1 percent to 4 percent worldwide on machines and engines with some exceptions to offset higher material costs.

This is breaking news. Please check back for updates.

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