Stock Market Today: These Earnings Expose a Huge Concern for 2013

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The stock market today opened lower as yet another American corporation, Caterpillar Inc. (NYSE: CAT), disappointed investors with its earnings call.

Here's the market roundup, along with one stock that is soaring today because analysts say there is a "50% chance" it could be acquired.

  • Caterpillar lowers earnings outlook for second time this year- The world's largest construction maker reported third-quarter earnings that beat expectations but cut its 2012 sales and earnings forecasts. CAT joins a growing list of American firms including McDonald's Corp. (NYSE: MCD), Google Inc. (Nasdaq: GOOG), and General Electric Co. (NYSE: GE) that have either missed expectations or lowered their outlook this earnings season. Caterpillar reported third-quarter net income of $1.7 billion, or $2.54 per share, compared with $1.14 billion, or $1.71 per share a year ago. Adjusting for one-time items CAT earned a profit of $2.26 per share, ahead of analysts' estimate of $2.22. The troubling facts for CAT include its order backlog fell 18% from the second quarter of this year and the Peoria, IL-based company now expects to generate much lower sales for the remainder of this year and 2013.

The company currently estimates it will generate net income between $9 and $9.25 per share on sales of $66 billion for fiscal 2012. This is down from a July forecast calling for EPS of $9.60 on revenue between $68 and $70 billion. In 2013 the company said its revenue could range between 5% higher or lower than this year's results. "The biggest concern is the declining backlog, which would imply a more challenging year next year, especially for mining, and whether or not North American construction will re- accelerate," Larry De Maria, a New York-based analyst for William Blair & Co. who has a buy rating on the shares, told Bloomberg News today in a telephone interview. "Caterpillar's business is very economically sensitive. Due to the softening of the global economy and increasing uncertainty, order rates have declined." After a bad start in trading today CAT stock has rebounded and is up 1.1% as of noon.

While earnings have taken their toll on corporate giants, this stock is up almost 30% today on hopes of a buyout:

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