Caterpillar shares up on earnings beat; cuts 2016 outlook
By Meredith Davis
(Reuters) - Caterpillar Inc (CAT.N: Quote) shares rallied Tuesday on better-than-expected second quarter earnings, even as the heavy machinery maker lowered its full-year forecast amid sluggish demand in mining and other industries.
Caterpillar shares, part of the Dow Jones industrial average .DJI, rose 4.7 percent to their highest level this year.
"They cut (full-year) guidance but they did beat this quarter. They seem to be setting themselves up for at least being able to meet or beat expectations in the future by addressing it now," said Jim Corridore, analyst at S&P Global Market Intelligence.
"The company controlled costs during the quarter and, given a very difficult environment, they are executing well," Corridore said.
Caterpillar said global uncertainty persists, and the recent vote in Britain to leave the European Union and the attempted coup in Turkey have heightened risks, especially in Europe.
A weakened global economy, combined with persistent political uncertainty, kept sales of new machinery sluggish. Sales fell 16 percent to $10.34 billion from a year ago.
"We're not expecting an upturn in important industries like mining, oil and gas and rail to happen this year," Chief Executive Doug Oberhelman said in a statement.
The company said commodity prices "appear to have stabilized, but at low levels." Continued...