Caterpillar Says Wall Street 'Too Optimistic' on Its 2017
01 Dezember 2016 - 6:25PM
Dow Jones News
By Joshua Jamerson
Caterpillar Inc. said Wall Street analysts are "too optimistic"
on its potential for earnings next year, but the manufacturing
giant signaled an infrastructure bill in the U.S. and OPEC's
decision to reduce oil production could help performance.
The company's stock rose 1% to $96.49 in morning trading in New
York.
Caterpillar's sales performance has lagged in recent years as
miners shelved equipment-buying plans as commodity prices fell, and
then oil prices also dropped, along with demand for related
equipment.
The company in a regulatory filing Thursday said the $38 billion
projection by analysts for revenue next year is "reasonable." The
company previously said revenue wouldn't be "significantly
different" from the roughly $39 billion expected this year.
Caterpillar also said the consensus view for earnings of $3.25,
according to a poll of analysts by Thomson Reuters, was too
optimistic, given given higher-than-expected incentive compensation
as well as the anticipated revenue decline.
However, the company said it sees potential for a new government
infrastructure spending, as Republican President-elect Donald Trump
hopes to boost infrastructure spending and will be working with a
GOP-controlled Congress. Still, Caterpillar expects an
infrastructure bill would have "little impact" in 2016.
Caterpillar also hopes strong crude prices will once again drive
sales of oil-field-related equipment after Representatives from the
Organization of the Petroleum Exporting Countries struck a deal
this week to slash output, sending U.S. crude prices soaring.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
December 01, 2016 12:10 ET (17:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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