Caterpillar misses, cuts guidance

Caterpillar (CAT) sinks 3.6% before the bell as its Q3 report misses on both lines.

Revenue falls 18% Y/Y, while EPS tumbles 43%.

Tuesday's September retail machinery sales numbers (-9% overall) suggested bad news might be around the corner.

Outlook: EPS of $5.50 on revenue of $55B versus previous guidance of $6.50/share on $56-58B in sales and against consensus of $6.20/share and $56.46B in revenue. (PR)

The commentary is decidedly downbeat. Here's Doug Oberhelman: "This year has proven to be difficult, with expected revenues [down] nearly ... 17% from 2012, with about 75% of the drop from Resource Industries, which is principally mining. Not only is mining down from 2012, the demand for equipment has been difficult to forecast. Orders for new mining equipment began to drop significantly in mid-2012 and have continued at very low levels."

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Comments (6)
  • quinnman
    , contributor
    Comments (136) | Send Message
    Don't worry. CAT is "fairly" priced. The Fed will continue QE and the economy will year....right..."green shoots" anyone?
    23 Oct 2013, 08:34 AM Reply Like
  • BTM
    , contributor
    Comments (486) | Send Message
    Looks like Chanos was right on this one.
    23 Oct 2013, 09:28 AM Reply Like
    , contributor
    Comments (19) | Send Message
    CAT will have trouble for the as long as commodity prices are on the floor. STAY AWAY
    23 Oct 2013, 09:36 AM Reply Like
  • Douglas E. Johnston
    , contributor
    Comments (1773) | Send Message
    outlook for next year is flat to 2H -> 5.25/shr. tangible equity is $11.5/share - shocked no good will writedown. i guess they are waiting till end of year for that doozy. They tout cashflow being great but its all working cap change. Next year, no inventory/net receivable boost -> they will barely cover dividend with free cash flow....where should it trade? and what color lipstick are they using?
    23 Oct 2013, 10:41 AM Reply Like
  • financeminister
    , contributor
    Comments (1215) | Send Message
    I was debating on whether to start a position in CAT.... finally decided that even though it's attractively valued, macro factors won't let CAT's revenues improve.
    23 Oct 2013, 11:28 AM Reply Like
  • Roady26.2
    , contributor
    Comments (393) | Send Message
    I was looking for CAT or DE under $80, but if CAT falls under $80 it looks like it may go even lower.
    23 Oct 2013, 12:39 PM Reply Like
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