Caterpillar Q1 Profit Beats View; Forecast Raised (CAT)


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Construction equipment maker Caterpillar Inc. ( CAT ) on Monday posted better-than-expected first quarter earnings and raised its full-year guidance, sending its shares higher.

The Peoria, IL-based company reported first quarter net income of $233 million, or 36 cents per share, compared with a net loss of$112 million, or 19 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 50 cents per share.

Total net sales fell 11% from last year, to $8.23 billion.

On average, Wall Street analysts expected a smaller profit of 39 cents per share, albeit on higher sales of $8.84 billion.

Looking ahead, the company raised its full-year earnings forecast to a range of $2.50 to $3.25 per share, which sales ranging from $38 billion to $42 billion. On average, analysts expect $2.69 per share on sales of $37 billion for the year.

Caterpillar shares rose $2.28, or +3.3%, in premarket trading Monday.

The Bottom Line
We had removed shares of CAT from our "recommended" list July 15,2008 when the stock was trading at $67.04. The company has a 2.44% dividend yield, based on Friday's closing stock price of $68.78. The stock has technical support in the $60-$63 price area. If the shares can firm up, we see overhead resistance around the $71-$75 price levels. We would remain on the sidelines for now.

Caterpillar Inc. ( CAT ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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