SMM10, April 24: Caterpillar (NYSE: CAT), the world's number one heavy machinery maker, fell more than 7% in pre-market trading on Tuesday, although the company had exceeded earnings expectations for the tenth time in a row. The stock fell to $118.95 at 08:48 et and closed at $128.71 on Monday, its lowest level so far this year. Mining and construction equipment makers face rising costs as a result of the Trump administration's tariffs. The Deerfield, Illinois-based company says the ongoing trade war between Beijing and Washington has led to higher steel and aluminum prices and prompted retaliatory action by trading partners. As a result, the additional cost of materials increased by $40 million in the third quarter.

Caterpillar, considered a barometer of global economic activity, said the extra costs far exceeded the impact of rising prices and cost-cutting periods for its products. As a result, the company now expects the impact of tariffs to reach a range of $100m to $200m by the second half of the year.

The world's largest maker of machinery and equipment, one of many large manufacturers in the US, is trying to rein in spending in response to a 36 per cent rise in hot-rolled steel prices over the past year as a result of tariffs.

"as a result of the increase in materials and freight, manufacturing costs have risen accordingly, while the rise in material costs is mainly due to higher steel prices and tariffs," the company said in a statement.

Caterpillar said adjusted earnings per share for the third quarter of 2018 were $2.86, higher than most analysts expected of $2.85.

"the current third quarter earnings per share hit a new high," Jim Umpleby, the company's chief executive, said in a statement.

Revenue for the quarter reached $13.5 billion, up 18 per cent from the same period in 2017 and well above the market forecast of $13.2 billion, according to the data. Sales growth in Caterpillar's main business units, construction, resources, energy and transport, was also strong, up 16 per cent, 35 per cent and 15 per cent, respectively.

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