Caterpillar Shares Slump As Company Offers Gloomy Outlook For Second Half

By Ciara LinnaneMarketsMarketWatch Pulse

Caterpillar Inc. shares [s; cat] fell almost 1% in premarket trade Tuesday, after the company beat second-quarter earnings estimates, but offered a gloomy outlook for the rest of the year. The heavy equipment maker said it had net income of $550 million, or 93 cents a share, in the second quarter, down from $802 million, or $1.31 a share, in the year-earlier period. Excluding restructuring costs, adjusted per-share earnings came to $1.09, ahead of the FactSet consensus of 96 cents. Sales fell to $10.342 billion from $12.317 billion, but were ahead of the FactSet consensus of $10.117 billion. "Together with our dealers, we're having success managing through the downturn in industries like mining and oil and gas, and in sluggish economic conditions in much of the developing world," Chief Executive Doug Oberhelman said in a statement. The company is not expecting a rebound in those sectors in the second half, and expects full-year results to come in at the low end of its guidance. Restructuring costs are expected to be about $700 million, up from an earlier forecast of about $550 million, mostly because of further job cuts to be carried out in the second half. Shares are up 16% in the year so far, while the S&P 500 has gained 6%.

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