Caterpillar’s a good proxy for the global economy. The maker of giant machines has benefited from a building boom — airports, skyrises, farms — all over the world. Even if you never looked at its chart, you could guess that the stock’s been crushed this year, and indeed it has. After doubling over the past 5 years, the company’s been halved, eliminating all of its gains.
But the other shoe hasn’t dropped just yet. In its earnings report this morning, the company reiterates its outlook for 2009, despite the sorry economy:
The 2009 economic outlook is extremely uncertain at this time, with substantial turmoil in financial markets and unprecedented government intervention around the world,” Owens said. “Our current outlook for 2009 calls for sales and revenues to be about flat with our full-year 2008 results. In 2009 we expect pockets of strength in global mining, energy markets and in the area of emerging market infrastructure development to offset acute weakness in North America, Europe and Japan. Further, we are confident that our integrated service businesses, which have grown significantly this year, will offer revenue and earnings support in the coming year. That said, given the recent economic turmoil, we will issue our 2009 profit per share outlook with our year-end release in January.
You’d have to admit, it doesn’t get much positive and optimistic than that. It surprised us. The market likes it too, as the stock is ticking up a few per cent pre-market.