Just when you thought you had heard the last of Chinese reverse mergers, along comes another accounting scandal that puts them back in the spotlight again.
The victim this time? Caterpillar, which on Friday stunned the market with news that it would have to take a $580m write down in the fourth quarter after it unearthed accounting irregularities at ERA Mining Machinery, a Chinese company that it acquired last June for $886m. Continue reading »
Is Caterpillar being overly optimistic about its China operations?
Even as one US company after another – ranging from Alcoa to FedEx and McDonald’s – sounded the alarm over the impact of China’s slowing growth on demand for their products, Caterpillar appeared relatively sanguine. Continue reading »
High-end consumer goods are hot, construction activities are not.
That is one conclusion that investors can make about the state of the Chinese economy after going through this week’s quarterly results from Apple and Caterpillar.
While Apple saw sales for the three months to the end of March surged on the back of ferocious Chinese demand for its iPhones, iPads and Macs, shares in Caterpillar took a pounding on Wednesday after the earthmoving equipment maker reported a marked slowdown in demand from China. Continue reading »