Caterpillar Inc. shares are trading roughly even after the company reported fourth quarter financial results. Revenue rose 34.8% to $12.9 billion – beating consensus estimates by $920 million – and earnings per share of $2.16 beat consensus estimates by $0.37 per share. The stock moved sharply higher in pre-market trading before falling sharply lower at the open. After the conference call began, these losses were pared to neutral levels later in the day.
While the company reported strong financial results, the market may see limited upside potential given the firm’s lofty price-to-earnings multiple. Management was also unable to comment on a U.S. tax probe of its Swiss unit other than to say that the company is cooperating and hoping for an expeditious resolution. The bright side is that tax reform and the new infrastructure bill are expected to be net positives for the upcoming years. (See also: Caterpillar Beats Estimates on Buoyant Global Demand.)
Caterpillar shares appear a little top heavy after a strong run this year, despite solid fourth quarter financial results. …read more
Read more here: Is Caterpillar Stock Topping Out, or Will the Uptrend Resume?