Shares of Caterpillar dropped 7 percent after it gave disappointing 2018 guidance and management pointed out costs were rising because of tariffs.
The company reiterated its prior 2018 EPS guidance range of $11.00 to $12.00 adjusted, but Wall Street expected the company to raise that forecast. The lower range of that forecast fell short of the $11.65 EPS estimated by analysts, according to Refinitiv.
"Manufacturing costs were higher due to increased material and freight costs. Material costs were higher primarily due to increases in steel prices and tariffs," the company stated in a press release. "In the fourth quarter, price realization, operational excellence and cost discipline are expected to more than offset higher material and freight costs, including tariffs."
Later in the release, the company said the impact of tariffs for third-quarter material costs was about $40 million.
