Caterpillar Tops Profit Estimates, Flags Rising Materials Costs
(Bloomberg) -- Caterpillar Inc. reported third-quarter earnings that topped analysts’ estimates while flagging concern over rising raw materials costs.
“In the fourth quarter, price realization, operational excellence and cost discipline are expected to more than offset higher material and freight costs, including tariffs,” the company said in a statement Tuesday.
- Caterpillar, an economic bellwether that was expected to report record earnings this year, is feeling the pinch as a trade war boosts metal costs and threatens demand growth for its signature yellow machines.
- 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.
- While the company said as recently as September that the trade spat hadn’t yet hurt sales, the International Monetary Fund’s Christine Lagarde said this month that policy makers should prepare for “choppy” waters in the global economy.
- The Caterpillar report comes a day after Ford Motor Co. said Donald Trump’s tariffs have made steel more expensive in the U.S. than any other market, escalating the company’s criticism of the president’s trade war.
- Caterpillar fell 3.1 percent at 8:32 a.m. before regular trading in New York. The heavy-equipment maker fell to the lowest closing price this year on Monday.
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