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Omar Venerio
Omar Venerio
Articles (1746) 

Friday Morning Market Highlights

Markets down, shares of Caterpillar jump on earnings beat

US Markets

U.S. stocks were down on Friday morning after yesterday's rally. The Dow fell 0.91% to 30,325, the S&P 500 index lost 0.80% to 3,757 and the Nasdaq Composite Index was down 0.64%, to 13,252.

Gainers

• Robert Half International Inc (NYSE:RHI) +6%

• Iron Mountain Inc (NYSE:IRM) +4.8%

• Lumen Technologies Inc (NYSE:LUMN) +5.3%

• Danaher Corp (NYSE:DHR) +3.3%

• NRG Energy Inc (NYSE:NRG) +3.3%

Losers

• Lincoln National Corp (NYSE:LNC) +6.4%

• Resmed Inc (NYSE:RMD) -6.4%

• United Rentals Inc (NYSE:URI) -4.5%

• Carnival Corp (NYSE:CCL) -4.2%

• Juniper Networks Inc (NYSE:JNPR) -3.6%

Global Markets

The main European stock markets traded in the red. The U.K.'s FTSE 100 retreated 1.18%, Germany's Dax dipped 0.87%, France's CAC 40 declined 1.19% and Spain's Ibex 35 was down 1.45%.

In Asia, Japan's Nikkei 225 fell 1.89%, India's BSE Sensex slid 1.26%, Hong Kong's Hang Seng retreated 0.94% and China's Shanghai Composite was down 0.63%.

Caterpillar releases earnings report

Shares of Caterpillar Inc. (NYSE:CAT) jumped more than 1% on Friday morning after the company announced its financial results for the fourth quarter of 2020. It posted earnings per share of $2.12, beating analysts' estimates by 63 cents, on revenue of $11.2 billion, which declined 14.8% year-over-year and fall short of expectations by $40 million.

CEO Jim Umpleby had the following to say:

"Our fourth-quarter and full-year results reflect the team's agility in a challenging environment while executing our strategy for long-term profitable growth. We achieved the adjusted operating profit margin established during our 2019 Investor Day while continuing to invest in products and services. We are well-positioned for the future and will emerge from the pandemic as an even stronger company."

In the quarter, the cost of sales decreased 15% year over year to $7.8 billion. The manufacturing costs were lower due to lower material and period manufacturing costs. The gross profit decreased 14% year over year to $3.45 billion and the gross margin was 30.7%, almost flat from the prior-year quarter.

Selling, general and administrative expenses declined 5% and research and development expenses were down 3% from the prior-year quarter. The operating profit margin reached 12.3%, down from 14.1% for the same quarter of 2019.

Caterpillar shares have advanced 1.4% since the beginning of the year versus the S&P 500's gain of 2.4%.

At the end of December, the T Rowe Price Equity Income Fund (Trades, Portfolio) boosted its investment in the stock by 60% to 545,000 shares.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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