Caterpillar (CAT), a bellwether for the global economy, beat views for a third quarter in which key markets saw a strong pandemic recovery. But the Dow Jones giant still didn’t offer any guidance. Caterpillar stock fell.




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Caterpillar Earnings

Estimates: Caterpillar earnings were expected to tumble 57% to $1.15 according to Zacks Investment Research. Analysts expected the Dow Jones stock to report a 24% sales drop to $9.67 billion.

Results: Caterpillar earnings came in at $1.34 a share as revenue slid 22% to $9.9 billion. Equipment sales fell more than 20% across each of Caterpillar’s four main business segments. Sales also fell in each of its four main geographies.

Caterpillar once again did not provide earnings guidance.


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Caterpillar Stock

Shares fell 3.2% to 157.91 on the stock market today. Caterpillar stock topped a 146.30 buy point in September, according to MarketSmith chart analysis. Shares are now extended, meaning they are not in buy range. Meanwhile, Caterpillar stock’s RS line is just below new highs, a sign of strong stock market outperformance.

In July, Caterpillar earnings for the second quarter plunged but beat estimates. The maker of construction, mining and other industrial equipment also didn’t update 2020 guidance.

But it signaled some economic recovery, saying nearly all its main production plants were working by mid-July.

Key market China, where the virus originated, appears to be bouncing back after the pandemic. Meanwhile, tensions between the U.S. and China are high.

However, surging coronavirus cases in the U.S. and Europe, while many countries are reimposing restrictions, could stifle economic growth once again.

This month, Caterpillar agreed to buy struggling Weir Oil & Gas for $405 million in cash. While known primarily for tractors, Caterpillar has an oil and gas business that is likely to benefit from Weir’s established pressure pumping and pressure control portfolio.

Find Aparna Narayanan on Twitter at @IBD_Aparna.

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