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The Earning Circus Is Back In Town

28 January 2019 by lberuti

We already had a trickle of results in the past few weeks, but the reporting season is about to gather steam. Over the next few weeks, all major companies will be releasing fourth numbers on both sides of the Atlantic. Today some heavyweights entered the fray. CAT ( Caterpillar Inc ) was among them and they did it in style by announcing their biggest quarterly profit miss over the last 10 years. The construction and mining equipment maker, widely considered a bellwether for the global industrial economy, reported a fourth-quarter profit that trailed analysts’ average estimate of $2.99 by 44cts at $2.55 per share and offered a cautious outlook for 2019. The company blamed slowing global growth and concerns around the US-China trade war. Its shares sunk roughly 10% and the cost of insuring its debt for 5 years jumped 7bps to 55bps per year. That is the kind of moves we usually only see on CAT around roll dates, when the maturity of 5-year CDS contracts is in fact extended by 6 months.