Log in

Caterpillar sales weaken but 2Q results top Street

Posted on Friday, July 31st, 2020 By Michelle Chapman, AP Business Writer


In this Nov. 4, 2019, file photo construction equipment made by Caterpillar are readied for export to Asia at the Port of Tacoma in Tacoma, Wash. Caterpillar Inc. reports financial results Friday, Jan. 31, 2020. (AP Photo/Ted S. Warren, File)

Caterpillar's sales tumbled 31% in the second quarter as dealers culled construction equipment from showrooms during the pandemic.

Dealers decreased machine and engine inventories by about $1.4 billion during the three-month period, compared with an increase of about $500 million a year earlier.

Still, the Deerfield, Illinois, manufacturer topped Wall Street expectations and shares jumped sharply before the opening bell in what has been an extraordinarily difficult year.

Revenue fell to $10 billion, from $14.4 billion a year ago, better than the projections for $9.2 billion from industry analysts, according to a survey by Zacks Investment Research.

Net income was $458 million, or 82 cents per share. Stripping out one-time costs, earnings were $1.03 per share, easily beating the 66 cents Wall Street was looking for.

Company shares rose 4% in premarket trading.

Earlier this month the Commerce Department reported U.S. construction spending fell 2.1% in May, with both home building and nonresidential activity declining.

The construction industry has been rocked by shutdowns. With cases rising again in many parts of the country, particularly in the Sunbelt which has driven the housing market for years, home building and commercial projects face are at threat.

But projects are moving ahead where possible, driven by extremely low mortgage rates. The U.S. reported last week that sales of new homes rose 13.8% in June, the second consecutive monthly increase.

Economists say sales could continue to rebound, but that depends on the course of COVID-19 outbreaks.

Some states that had attempted to restart their economies are rolling back those efforts as cases surge.

Companies Mentioned in This Article

CompanyBeat the Market™ RankCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Caterpillar (CAT)2.3$134.92+0.4%3.05%18.11Hold$137.94
Compare These Stocks  Add These Stocks to My Watchlist 

Best Growth Stocks - Best Stocks to Buy Now

The stock market has been growing since the New York Stock Exchange opened its doors in 1817. Sometimes, a stock will outpace the rest of the market in terms of growth. These skyrocketing securities—or the ones that analysts expect to skyrocket—are called growth stocks.

What Every Investor Needs to Know About Growth Stocks

Growth stocks are a great opportunity for an investor to make money in the stock market, but you’ve got to know what you’re going to buy or sell. A good understanding of growth stocks will help you get there.

At the beginning of a bull market, you can almost choose stocks randomly and find yourself a winner. Now that we are entering the ninth year of the current bull market, growth stocks have appreciated considerably and it's becoming far more challenging to find stocks with real opportunities for appreciation.

Growth companies are still largely outperforming their value counterparts in the United States and the rest of the world largely because of low interest rates, improved corporate earnings and global economic growth. Over the last five years, the S&P 500 Growth Index has returned 14.22% per year. During the same time, the S&P 500 Value Index returned just 12.94%.

Now that the bull market is now nearly a decade old, stocks have become very expensive. Value investors are largely sitting on the sidelines and growth investors are having a hard time figuring out where the remaining growth opportunities exist.

If you are looking for growth stocks in an increasingly small field, we have identified the 10 best growth stocks to buy right now based on their expected earnings growth over the next several years. These companies are all growing rapidly and will likely see double-digit earnings growth next year.

View the "Best Growth Stocks - Best Stocks to Buy Now".

Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.