Caterpillar Rises on Construction Sales Increase
Caterpillar Inc., (CAT) the world’s largest maker of construction and mining equipment, rose the most in three months after saying it sees increased sales of building equipment and plans more production in China.
The company has seen “slightly increasing sales to users for a number of months” in construction, Doug Oberhelman, chairman and chief executive officer of Peoria, Illinois-based Caterpillar, said during a call with analysts today. In China, Caterpillar will increase production this quarter after reducing output to let inventory levels fall.
“People were encouraged,” Ted Grace, a Boston-based analyst for market maker Susquehanna Financial Group who has a buy rating on the shares, said in a phone interview today. “They were a little more positive on China.”
A bigger order backlog and rising cash flow also were positives, Grace said.
The shares had dropped as much as 1.2 percent earlier today after the company cut its 2013 forecast and first-quarter earnings trailed analysts’ earnings estimates.
Profit in 2013 will be about $7 a share, down from a January projection of $7 to $9, the company said. Sales will be $57 billion to $61 billion, from an earlier forecast of $60 billion to $68 billion.
First-quarter profit fell to $1.31 a share, down from $2.37 a share a year earlier and below the $1.38-a-share average of 20 analysts’ estimates compiled by Bloomberg.
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