Caterpillar tumbles over 4.0% amid weak quarterly earnings

Caterpillar (CAT.US) stock dropped more than 4.0% on Tuesday after the industrial giant posted a disappointing quarterly profit, which was mainly affected by rising costs. 

• The construction equipment company reported earnings of $3.86 per share, well below a Refinitiv consensus estimate of $4.06 per share. 

• Caterpillar said its bottom line was impacted by unfavorable manufacturing costs largely reflected higher material costs, unfavorable cost absorption and increased period manufacturing costs.

• "Our global team delivered one of the best years in our nearly 100-year history, including record full-year adjusted profit per share," said Chairman and CEO, Jim Umpleby. "Despite supply chain challenges, the team achieved double-digit top-line growth and generated strong ME&T free cash flow. We remain committed to serving our customers, executing our strategy and investing for long-term profitable growth."

• Revenue rose 20% YoY to $16.6 billion in Q4, which beat analysts’ estimates of $15.89 billion.

Caterpillar (CAT.US) stock jumped 9% since the beginning of the year and last week reached a fresh all-time high at $266.40. However moods reversed this week and stock launched today's session with a bearish price gap and moved sharply towards support at $241.25, which coincides with 23.6% Fibonacci retracement and 50 SMA (green line). Despite negative sentiment buyers attempt to regain control in the evening and as long as price sits above the aforementioned support, another upward move may be launched. Source: xStation5