Caterpillar Slumps After Missing Earnings as China Demand Slows
(Bloomberg) -- Caterpillar Inc. shares fell after it reported fourth-quarter sales and earnings that missed estimates on lower demand in China.
The company also issued a 2019 profit forecast range which, at the low end, was below the average of analysts’ expectations.
- The report from Caterpillar, considered an economic bellwether, suggests a slowdown in Chinese demand in the face of a persistent trade row.
- The outlook could help add to investor concerns that have prompted swings in financial markets and a cut in the International Monetary Fund’s global growth forecast.
- Caterpillar shares posted the biggest quarterly decline in more than three years in the final three months of 2018 amid concern that weaker commodity prices, signs of slowing in China and risks to the European economy posed a threat to demand for company’s signature yellow diggers and bulldozers.
- The company has been trying to raise prices at a time when analysts say some end-user industries may be reaching peaks in their growth cycles.
- The report was released before regular trading in New York. Caterpillar fell more than 5 percent to $129 at 7:46 a.m.
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