How Big a Hit Will Caterpillar Take From SEC Probe?

Industrials

Published: February 18, 2015 10:30 am

Last Updated: February 18, 2015 10:31 am

In a regulatory filing Tuesday, Caterpillar Inc. (NYSE: CAT) announced that it was under investigation by the Securities and Exchange Commission (SEC) in regard to its cash movement. The company received a subpoena back in early January.

The investigation is specifically targeting whether Caterpillar illegally moved money between its U.S. and foreign subsidiaries.

However, Caterpillar believes that the investigation will not have a material effect on its financial position. The company also said in its most recent filing that it had made a presentation to the SEC on Caterpillar SARL, on which the regulatory authority is conducting an investigation.

There are even more talks with the SEC about a possible resolution of yet another federal investigation. This one would involve Caterpillar’s Progress Rail subsidiary.

Despite beliefs that this ongoing investigation would have an impact the company’s financial position, Caterpillar believes that “a loss is probable” as a result of the Progress Rail situation, but that the company did not expect the investigation to have a major negative effect on its finances.

Shares of Caterpillar were virtually unaffected by the news and were relatively flat at $85.49 Wednesday morning. The stock has a consensus analyst price target of $84.29 and a 52-week trading range of $78.81 to $111.46.

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