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Caterpillar Inc. (CAT)

  • Thu, Nov. 19, 12:24 PM
    • Caterpillar (CAT -1.2%) is lower after disclosing a 16% decline in its monthly worldwide machine retail sales for October vs. an 11% drop in September.
    • CAT's sales have now fallen for 35 consecutive months, with October's 16% drop ranking as the largest drop during the streak and the biggest monthly decline since February 2010.
    • Sales fell vs. the prior-year period in each of CAT's four global regions and three main industries, with the worst slowdowns in construction sales in Latin America (-41% in October) and in resources industry sales in Asia (-37%).
    • "The global mining and construction business has been in a funk due to the crash in commodity prices, the slowdown in China, and the strong dollar, and the monthly machinery sales totals from Caterpillar really put these declines into perspective," Bespoke writes.
    • Axiom Capital reiterates its Sell rating and $28 year-end 2016 price target on the shares.
    | Thu, Nov. 19, 12:24 PM | 11 Comments
  • Mon, Nov. 16, 2:21 AM
    • Seeing some serious headwinds ahead, Caterpillar (NYSE:CAT) is warning that it doesn't expect Chinese demand for excavators to return to the highs hit several years ago.
    • "That shows how far off the peak we are," Caterpillar's Tom Pellette told the FT. "For China specifically, our expectation is that the market will rebound but we are not planning [for it to] get back to 2011/2012 levels."
    • The remarks are significant as the group is often dubbed a global bellwether, with its sales giving investors insights into the state of economies across the globe.
    | Mon, Nov. 16, 2:21 AM | 2 Comments
  • Thu, Nov. 12, 8:11 AM
    • Finning International (OTCPK:FINGF), the world's biggest dealer of Caterpillar (NYSE:CAT) equipment, is slashing 1,100 jobs in Canada and South America due to weak sales.
    • The latest cuts bring the total to 1,900 this year, or 13% of the company's workforce.
    | Thu, Nov. 12, 8:11 AM | 1 Comment
  • Tue, Nov. 3, 4:45 PM
    • The U.S. set preliminary import duties on corrosion-resistant steel products from China, India, Italy and South Korea, but they are not nearly as heavy as many observers had expected, and steel company stocks (NYSEARCA:SLX) initially fell after the announcement at ~3:00.
    • While the preliminary duties on China are high, as expected, duties on Korea and Italy were "much smaller than expected," while there were no duties for Taiwan, which industry followers consider “disappointing," according to Axiom Capital's Gordon Johnson.
    • Axiom sees the news as a slight loss for U.S. steel industry participants, as it suggests incremental duties on outstanding trade cases will focus on China, with little emphasis on other countries China can easily use as an intermediary to get steel into the U.S.
    • X +0.6% in regular trading but -8.1% AH; AKS -2.9% in regular trading and -2.4% AH.
    • Also, in regular trading: CLF +7.3%, JOY +0.7%, CAT +0.5%, NUE -0.3%, CMC -0.4%, RS -1.8%.
    | Tue, Nov. 3, 4:45 PM | 7 Comments
  • Tue, Oct. 27, 11:25 AM
    • Select vehicle stocks are weaker after Paccar (PCAR -5.9%) fell short of revenue estimates with Q3 earnings and Cummins (CMI -8.5%) warned on demand trends in Brazil and China.
    • Paccar reported deliveries to the U.S. and Canada were up 3% during the quarter. New truck deliveries to Europe increased 11%. The story at Cummins was darker as revenue guidance was dropped.
    • There's a bit of a contagion effect as truck, heavy-duty machinery, and RV sellers such as Navistar (NAV -13.2%), Winnebago (WGO -3.5%), Thor Industries (THO -1.6%), Caterpillar (CAT -0.8%), Manitowoc (MTW -3.6%), Polaris Industries (PII -0.8%), Arctic Cat (ACAT -4.6%), and Spartan Motors (SPAR -4.3%) are all weaker.
    • Ford is also down off after an earnings miss and GM issued another million-car plus recall.
    • Previously: Ford Motor misses by $0.02, beats on revenue (Oct. 27 2015)
    • Previously: GM recalls 1.4M older vehicles due to fire risk (Oct. 27 2015)
    | Tue, Oct. 27, 11:25 AM | Comment!
  • Fri, Oct. 23, 5:25 PM
    • Seeing any upturn in sales or earnings still at least a year away, Caterpillar (NYSE:CAT) says it is shifting its focus to loyalty in the hope that helping end users do more with less will help it sell more replacement parts and win loyalty for the long term.
    • "It’s very important to us to have machines out in the dirt working," CFO Brad Halverson tells Bloomberg. “To have a field population that generates parts and service is good for our dealers, ourselves and our customers in terms of providing a lower owner operating cost.”
    • While it might seem counter-intuitive for a company to effectively help its customers buy less of its products, it is part of CAT’s strategy for the downturn, says resource industries group head Edward Rapp.
    • The strategy is not going to be much of a moneymaker for CAT in the short run, Jefferies analyst Stephen Volkmann says, "but it makes people think, 'Cat’s got my best interests in mind.'"
    | Fri, Oct. 23, 5:25 PM | 13 Comments
  • Thu, Oct. 22, 2:49 PM
    • Caterpillar (CAT +2.1%) is higher even after posting disappointing Q3 results and lowering its 2015 earnings guidance, as investors seem to decide the results weren't as bad as they looked.
    • Citi says CAT's earnings quality was better than the headline number suggests, as the operating segments combined to top its estimate by $0.05/share, including better than expected results in both Construction Industries and Energy and Transportation.
    • "The results were in line with the pre-announcement and not worse," according to Longbow Research.
    • Not all observers are so sanguine, as Jefferies analyst Stephen Volkmann senses "a weak feel to everything here," as CAT’s E&T segment “is carrying the load here, and the concern is how long that can last.”
    | Thu, Oct. 22, 2:49 PM | 6 Comments
  • Thu, Oct. 22, 7:54 AM
    • Q3 EPS excluding restructuring costs of $0.75 compares to $1.72 a year ago, on revenue of $11B vs. $13.5B a year earlier.
    • 2015 outlook: Company keeps revenue guidance unchanged at about $48B, while lowering its EPS outlook to $3.70 from $4.70. "The environment remains extremely challenging for most of the key industries we serve, with sales and revenues down 19% from the third quarter last year," says CEO Doug Oberhelman. The expectation for 2015 restructuring costs has also increased significantly, from about $250M to about $800M.
    • Preliminary guidance for 2016: Sales and revenues are expected to be about 5% below 2015.
    • CAT -3.8% premarket
    • Q3 results
    | Thu, Oct. 22, 7:54 AM | 12 Comments
  • Thu, Oct. 22, 7:35 AM
    • Caterpillar (NYSE:CAT): Q3 EPS of $0.75 misses by $0.03.
    • Revenue of $10.96B (-19.1% Y/Y) misses by $290M.
    • Press Release
    | Thu, Oct. 22, 7:35 AM | 10 Comments
  • Wed, Oct. 21, 5:30 PM
  • Wed, Oct. 21, 9:27 AM
    • Caterpillar (NYSE:CAT) reports that its retail machines sales were down 11% Y/Y in the three months ending September, with resources industries down 6% and construction industries down 13%.
    • Energy & transportation retail sales in the same period were down 23%.
    • SEC Form 8-K
    | Wed, Oct. 21, 9:27 AM | 14 Comments
  • Thu, Oct. 15, 9:14 AM
    • Terex (NYSE:TEX) -3.6% premarket after Manitowoc (NYSE:MTW) pre-announced lower than expected Q3 revenue following yesterday's close, pointing specifically to weakness in its cranes segment.
    • MTW said its cranes segment continues to be hurt by a deteriorating demand environment, particularly in the Middle East and Asia, and lower than expected tower and crawler crane shipments exacerbated the Q3 shortfall in revenues.
    • Other companies in the commercial equipment sector include Accuride (NYSE:ACW), Meritor (NYSE:MTOR), Deere (NYSE:DE) and Caterpillar (NYSE:CAT).
    • MTW -14.4% premarket.
    | Thu, Oct. 15, 9:14 AM | Comment!
  • Thu, Oct. 8, 2:21 PM
    • Citigroup questions the sustainability of the recent rally for some machinery stocks, saying its cautious view on the global economy and downbeat near-term outlook for most commodities make it wary on the more China/commodity-levered names such as Caterpillar (CAT +1.8%) and Joy Global (JOY +10.9%).
    • Citi says short-covering does not appear to have played a major role in the recent rally, at least relative to other heavily-shorted sectors; the firm senses conviction levels have been growing on the short side in recent weeks for JOY, Oshkosh (OSK +2.3%) and United Rentals (URI +3.4%), and historical seasonal patterns argue against being too bearish against Deere (DE +2.2%).
    • In light of bearish investor positioning, the firm favors Buy-rated URI, OSK and Eaton (ETN +1.6%).
    | Thu, Oct. 8, 2:21 PM | 4 Comments
  • Thu, Oct. 1, 3:35 PM
    • With Caterpillar's (CAT -1.8%) stock back to 2010 prices, shorts have risen to levels not seen since 2009, according to Markit and Bloomberg, with roughly 7% of the company's shares, or $2.7B, sold short.
    • At the start of this year, the short ratio was closer to 2%.
    • Working for the shorts are fundamentals, but working against them is the loyalty of CAT shareholders, a $10B buyback authorization through 2018 (of which, $3B has already been used), and a dividend which has been raised six times since 2009 (the stock now yields nearly 5%).
    • That dividend costs nearly $2B per year and free cash flow to equity was $4.5B in the 12 months ended June 30. It seems like plenty of coverage, but $4.5B is down 38% from the prior period and the lowest amount since 2011. More sizable drops could put the dividend in jeopardy.
    | Thu, Oct. 1, 3:35 PM | 23 Comments
  • Mon, Sep. 28, 2:48 PM
    • It isn't just Glencore (OTCPK:GLCNF, OTCPK:GLNCY) who is tanking, as at least one measure of raw materials producers plunges to seven-year lows following the company's woes and data that showed weakening Chinese industrial profits.
    • Shares of Glencore plunged 29% to close at just 69 pence, an all-time low, exaggerated by a damning report that said future earnings are so uncertain that the company may need to direct all of its efforts to repay debt.
    • Freeport McMoRan (FCX -10.2%) is hit hard after breaking below support at $10/share, and global mining peers Rio Tinto (RIO -4.1%), BHP Billiton (BHP -4.5%) and Vale (VALE -9.4%) also are smacked down.
    • A number of other firms also are in situations not that much different from Glencore, says DTN analyst Darin Newsom, noting that Caterpillar (CAT -2.2%) and Deere (DE -1.6%) have been struggling and adding that pressure on Glencore may “create a vacuum those other struggling companies could get sucked into."
    • Along with oil and gas producers and precious metals miners, even financial stocks are affected, with Morgan Stanley (MS -3.6%) and Goldman Sachs (GS -3.4%) underperforming their banking peers, perhaps as investors grow nervous about the potential for any of Glencore's problems possibly blowing back on other commodity trading operations.
    | Mon, Sep. 28, 2:48 PM | 11 Comments
  • Fri, Sep. 25, 5:55 PM
    • Caterpillar (NYSE:CAT) is downgraded to Market Perform from Outperform with a $60 price target, slashed from $90, at William Blair following yesterday's guidance cuts and planned workforce reduction.
    • The firm cites "too many headwinds to ignore" - including North America locomotives; oil, gas and other commodity investments; and emerging market weakness such as Brazil and China - that likely will spill over into at least next year, adding that even in the U.S., a market that typically has been a source of strength, weakness in the ABI is troubling, with no recovery in oil and gas in sight.
    • Blair says there are no clear major catalysts that could provide any sort of positive momentum for CAT other than an acceleration in the global economy, for which there is currently "no visibility."
    • In the wake of CAT's woes, analysts Barclays and Raymond James advise investors to stay away from CAT and most of the overall machinery sector.
    • Earlier: Barclays begins U.S. machinery sector with negative view
    | Fri, Sep. 25, 5:55 PM | 17 Comments
Company Description
Caterpillar Inc is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company is also a U.S. exporter.