Caterpillar (CAT) Beats Consensus On Strong Asia, But US Sucking Wind

Caterpillar (CAT) handily beat consensus this morning, largely on huge sales from emerging markets in Asia. These markets are growing six times as fast as North America. CAT management also said that it “would be difficult for the (U.S.) economy to avoid a recession.”

Caterpillar, which derives much of its North American income from U.S. housing and construction activity, also lowered its forecasts for home starts for the year. Bloomberg:

Caterpillar, whose economic commentary in October contributed to a decline in the Standard & Poor’s 500 Index, today lowered its projection for U.S. housing starts to “slightly under 1 million units” this year, the lowest since 1945. Owens said in April he expects the housing market to “over-correct on the downside.” New construction rose 9.1 per cent to a 1.066 million pace in May, the U.S. Commerce Department said July 17.

CAT reported net income of $1.11 billion or $1.74 per share, up from $1.23 a year earlier and well ahead of the $1.54 Street consensus. Sales rose 20% year-over-year to $13.6 billion, beating the mean estimate of $12.6 billion.

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