Caterpillar (CAT - Get Report) posted weaker-than-expected second quarter earnings Wednesday, and said full-year profits would come in at the lower end of guidance, as slowing global trade hit the bottom line of the world's biggest industrial equipment maker.
Caterpillar said adjusted earnings for the three months ending in June came in at $2.83 per share, up just 1 penny from last year and well shy of the $3.11 Street consensus forecast. Group revenues, Caterpillar said, rose 3% from last year to $14.43 billion and matched analysts' forecasts after cautioning last month that Asia-Pacific retail sales had fallen 4% for the rolling three-month period that ended in May on softer demand linked to the U.S.-China trade dispute.
Looking into the 2019 year, Caterpillar said it will maintain its earnings guidance in the range of $12.06 to $13.06 per share, but said the final tally will likely be at the lower end of that range.
"Sales and revenues increased this quarter, including a record performance from Construction Industries, which reflected our strong competitive position globally," said CEO Jim Umpleby. "Our strong operating cash flow in the quarter allowed us to repurchase shares and pay dividends of about $1.9 billion. This is in line with our intention to return substantially all free cash flow to shareholders."
Caterpillar shares were marked sharply lower at the start of trading following the earnings release, falling 6.8% to change hands at $128.55 each, the lowest since mid-June and a move that trims the stock's year-to-date gain to around 2%.