Caterpillar (CAT) CEO Oberhelman Sees China as 'Huge Opportunity', But Remains Cautious

October 19, 2012 8:31 AM EDT
Caterpillar (NYSE: CAT) CEO Doug Oberhelman commented today that China and the U.S. "need each other." Comments were made at an Economic Club of Chicago event Thursday night.

Oberhelman sees China as a "huge opportunity" as its population -- and, consequently, middle class -- continues to grow. He also noted that China was "changing in front of our eyes."

Earlier this week, China's National Bureau of Statistics said that the Country's growth in the third-quarter of 2012 fell to 7.4 percent and was down about 0.2 points from the prior quarter. The GDP number was the lowest since the start of 2009, the Bureau said.

Next week, Caterpillar is expected to report a 31 percent increase in third-quarter EPS from last year to $2.24. The number would 12 percent sequential drop with revs slipping about 3 percent over the same period.

News also comes following Oberhelman's September remarks, which included lowered expectations for fiscal 2015 earnings. Shares are down aobut 4 percent since then.

Not helping things out today are General Electric (NYSE: GE) and Honeywell (NYSE: HON). Both conglomerates, which reach multiple sectors of industry and, for GE, healthcare and finance, reported rather weak results for the third-quarter. GE's EPS was in-line at 36 cents while Honeywell's sales missed expectations. The numbers might also hint at continued macro weakness, or growth coming in slightly slower than Street expectations.

Investors in Caterpillar have been toughing it out as well. Since last year's third-quarter beat, shares have remained flat. Ahead of the bell, Caterpillar is just over 1 percent lower.

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