Japan machine-makers avoid the caterpillar crawl

Results from Fanuc Corp. and Komatsu were a mixed bag Monday. Factory-automation giant Fanuc reported an 8.4 percent drop in fiscal first-half operating income and saw its shares rise, while construction-equipment-maker Komatsu posted an 80 percent profit surge that was rewarded with a stock decline. Put that perplexing share reaction down to the topsy-turvy world of machinery-makers, where investors tend to view dismal earnings as a sign that a company is nearing the bottom, and good results as a warning that it's close to the top. The overall picture, though, is that concerns sparked by U.S. bellwether Caterpillar Inc. last week of late-cycle cost pressures and a deteriorating China outlook have been overdone, at least as far as the Japanese firms are concerned. China's faltering economy has been a key focus. Fanuc's sales in the country, already shrinking, fell a further 42 percent in the quarter through Sept. 30, compared with the previous three months.