Caterpillar (CAT) Beats Consensus On Strong Asia, But US Sucking Wind

Caterpillar (CAT)
handily beat consensus this morning, largely on huge sales
from emerging markets in Asia. These markets are growing six
times as fast as North America. CAT management also said that it
"would be difficult for the (U.S.) economy to avoid a recession."

Caterpillar, which derives much of its North American income from
U.S. housing and construction activity, also lowered its
forecasts for home starts for the year. Bloomberg:

Caterpillar, whose economic commentary in October contributed to
a decline in the Standard & Poor's 500 Index, today lowered
its projection for U.S. housing starts to "slightly under 1
million units'' this year, the lowest since 1945. Owens said in
April he expects the housing market to "over-correct on the
downside.'' New construction rose 9.1 percent to a 1.066 million
pace in May, the U.S. Commerce Department said July 17.

CAT reported net income of $1.11 billion or $1.74 per share, up
from $1.23 a year earlier and well ahead of the $1.54 Street
consensus. Sales rose 20% year-over-year to $13.6 billion,
beating the mean estimate of $12.6 billion.