Monday, October 24, 2011

Caterpillar (CAT) Results Show No Signs of Major Slowdown in Global Economy

The big Sunday European meeting seems to be having little effect on markets this morning, as we now wait for the big Wednesday meeting.  So off to company specific news.

Caterpillar (CAT) has become one of the de facto global growth names, as this multinational has thrived with the help of global labor arbitrage, and massive government spending in developing markets on infrastructure spending.  While the acquisition of Bucyrus has skewed numbers a bit, results reported this morning continue to impress, and there appear to be little signs of the global slowdown in their numbers.  The company did add a significiant amount of jobs globally, but we don't have a country by country breakdown in the earnings release.

Technically the stock was hit hard during the Euro crisis, as worries about a global slowdown wrecked all the cyclicals, but has rallied ferociously back with the general market.  The stock is up 5%+ in premarket, just above $92 as I type.

Full report here.

Via Reuters:
  • Caterpillar Inc reported a 44 percent quarterly earnings increase and record revenue due to strong demand, far exceeding analyst estimates.  The world's largest heavy machinery manufacturer reported third-quarter net income attributable to common shareholders of $1.14 billion, or $1.71 per share, compared with $792 million, or $1.22 per share, a year earlier.  Excluding the impact of the recent acquisition of Bucyrus, earnings were $1.93 a share.
  • Analysts on average had expected Caterpillar to earn $1.54 per share in the third quarter.
  • Sales rose 41 percent to $15.7 billion, which is a record, according to the company.
  • Caterpillar said full-year 2011 results would come in at the highest end of its previous outlook. The company now expects annual revenue of $58 billion, including its recent acquisition of Bucyrus. Its previous forecast had been a range of $56 billion and $58 billion.
  • Profit is now expected to come in at $6.75 per share for the year, compared to a prior forecast of $6.25 to $6.75.  The outlook includes a negative impact from the acquisition of Bucyrus of about 50 cents a share. Without the impact of Bucyrus, Caterpillar expects 2011 profit of about $7.25 a share.
  • The company also gave initial projections for 2012 revenue, saying it expects sales to improve 10 percent to 20 percent next year.
  • The world's largest maker of construction and mining equipment also says it is continuing to add jobs — nearly 5,000 between June and September alone.
Strangely, much like a bank - Caterpillar took a $17M gain from a decrease in provision for credit losses.  I guess everyone is a pseudo financial nowadays.

[Jul 22, 2011: Caterpillar Misses EPS Estimates, but Beats on the Top Line and Raises Guidance]
[Apr 29, 2011: Caterpillar Continues Its Winning Ways]
[Jan 27, 2011: Caterpillar - Another Home Run Report]
[Oct 21, 2010: Caterpillar Scores with Now Redundant Playbook: Slashed Domestic Labor + Emerging Market Growth = Mad Money]
No position

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012