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Caterpillar pares gains after company says earnings estimate may be 'too optimistic'

A Caterpillar 953C track loader moves soil to a dump truck as contractors work during the construction of residential housing in the Norton Commons subdivision in Louisville, Kentucky.
Luke Sharrett | Bloomberg | Getty Images

Shares of Caterpillar abruptly pared earlier gains after it said that consensus expectations for fiscal 2017 earnings per share are "too optimistic."

The stock was 2 percent higher before being halted around 11:04 a.m. ET, for news pending. It reopened lower and ended the session modestly higher.

Given "expected headwinds," the consensus estimate for earnings per share of $3.25 is "too optimistic," the company said in materials for its presentation at the Credit Suisse Conference.

Volatility in oil prices, weakness in North America for construction equipment, and potential fallout from the U.K. decision to leave the European Union were listed among Caterpillar's concerns.

Despite these headwinds, Caterpillar said it is "encouraged by the potential of a U.S. infrastructure bill, tax reform, smart regulation, commodity prices and the recent OPEC announcement."

The company added that although a potential infrastructure bill in the U.S. is a positive, it doesn't expect much impact in fiscal 2017.

Caterpillar shares have been on a tear, gaining 41 percent so far in 2016.