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Caterpillar Clarifies “High Watermark” Comment

Courtesy of ZeroHedge. View original post here.

Two weeks ago today, the market tumbled when during its conference calls following an impressive Q1 earnings call, Caterpillar warned that Q1 was the "high watermark" for the year. With that statement the company earned the scorn and ire of countless investors and sellside analysts, many of whom upgraded the stock  before bothering to listen to the call.

Well, two weeks later, Caterpillar management finally decided to "clarify" what it meant, when during a Wells Fargo Industrials Conference this morning, the heavy machinery maker said that the "high water mark" comment from the first-quarter earnings call wasn’t meant to suggest that markets are peaking.

"All we meant was that we had an exceptionally strong first quarter," Caterpillar’s management said according to Bloomberg, although it is even more confusing how one can misread a "high watermark" comment as anything but, except of course if your compensation is closely tied to any further stock upside. Such as that of Caterpillar management.

Recall Caterpillar shares sank 6.2% on April 24 after the "high water mark" comment, which many interpreted as the company marking the peak in the cycle, and dragged the entire market lower.  This morning, shares rose as much as 1.3% in pre-market trading.


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