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%.
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, 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. 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. 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%).
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.
Thu, Sep. 24, 11:51 AM
- "After our scrub of the financials, as well as roughly $9B of failed acquisitions in the past four years (one of which was later rendered a fraud), 2 business segments that we believe are in a state of structural decline, and one that appears to be rolling over at present, we see forward EPS revision risk as high," says Axiom's Capital Gordon Johnson, initiating Caterpillar (CAT -6.5%) with a Sell rating (his note being released this morning ahead of CAT's guidance cut and restructuring plans).
- Johnson's price target of $28 by year-end 2017 is a whopping 60% below where the stock closed at last night.
- Also noted by Johnson is the SEC's focus on CAT's intercompany dealings via Caterpillar Financial - it's likely to weigh on the company's ability to use leverage to fund sales between itself and wholly-owned foreign subsidiaries for which there is no known end-buyer (less-politely known as channel stuffing).
- "Adding it all up, we see earnings risk that is not fully understood by those who currently hold the stock."
Thu, Sep. 24, 11:22 AM
- Caterpillar's (CAT -6.3%) latest woes are wreaking havoc on other machinery stocks, including Deere (DE -3.4%), Joy Global (JOY -2.4%), Cummins (CMI -2.8%) and Terex (TEX -5.6%).
- CAT said today it is lowering its sales outlook for the year and will cut as many as 5K jobs between now and the end of 2016, and that sales and revenue could drop in 2016 for a record fourth straight year.
- Earlier this week, CAT gave its latest update on three-month rolling sales figures, which have now declined for 33 straight months.
Thu, Sep. 24, 9:11 AM
- The company now sees sales and revenues totaling just $48B this year, down $1B from the previous outlook. 2016 sales and revenues are expected to fall 5% from this year.
- In response, the company sets in place plans expected to cut operating costs by about $1.5B annually. Four thousand to 5K job cuts are expected by year-end 2016, with job cuts in total perhaps eventually reaching 10K.
- If 2016 revenues decline as expected, it would mark the first time in the company's 90-year history that revenues have fallen for four consecutive years.
- "We are facing a convergence of challenging marketplace conditions in key regions and industry sectors namely in mining and energy," says CEO Doug Oberhelman.
- Source: Press Release
- CAT -6% premarket
Fri, Sep. 4, 8:22 AM
- Caterpillar (NYSE:CAT) -1.5% premarket after Robert W. Baird downgrades shares to Neutral from Outperform and lowers its price target to $77 from $89, as the firm's May upgrade thesis that commodities would find a bottom after years of decline fails to gain traction amid rising China-driven macro volatility.
- "Against this backdrop, upside from [CAT's] resources business appears increasingly unlikely, while peer OEM commentary and results are suggesting that fundamentals can actually get worse rather than better in the near term (a combination of volume declines and price compression)," writes analyst Micera Dobre.
- Shares fell 2.2% yesterday following Joy Global's guidance cut and gloomy macro outlook.
Thu, Aug. 27, 2:11 PM
- Caterpillar (CAT +2.2%) says it has notified workers it will reduce staff in its customer services support division by cutting 475 jobs, as declining revenues from global mining and construction activities hits the bottom line.
- The layoffs will mostly affect employees at facilities around central Illinois, including Peoria and Morton, but also will include some global positions, the company says.
- CAT has cut ~4.8K employees over the past year and 20K full-time workers worldwide since 2012, more than 10% of its global workforce.
Mon, Aug. 10, 10:46 AM
- Caterpillar (CAT +3.3%) shoots higher in early trading following a Barron's weekend article that says the company has used the mining and oil drilling downturns to prepare for a rebound that could begin next year, and send shares should have an "excellent chance" of returning 20% over the next year.
- CAT’s goal during downturns is to limit the decline in operating profit to 30% of the decline in revenue, and the company is surpassing the goal after falling short in past cycles, according to the report.
- CAT's net debt is just $3B, and last year the company generated $4.5B in free cash flow; this year it could produce $4B for a free cash yield of 8.6%, and the strong financial position affords plenty of flexibility.
Tue, Jul. 28, 12:04 PM
- Reporting an earnings clunker last week, Caterpillar (CAT +3.2%) promised to buy back a whopping $1.5B in stock in Q3, and today announces an accelerated stock repurchase program with Citibank for that amount.
- The $1.5B buyback would bring repurchases for the year up to $2B. At today's stock price, $1.5B is good for about 19M shares or roughly 3.2% of the float.
- After this deal, more than $5B of the company's $10B buyback authorization will remain.
- Source: Press Release
- Previously: Caterpillar -3.5% as revenues miss, guidance cut due to dollar (July 23)
Thu, Jul. 23, 8:01 AM
- Q2 EPS excluding restructuring costs of $1.27 compares to $1.57 one year ago on revenue of $12.3B vs. $14.2B a year ago.
- 2015 outlook: Company cuts revenue guidance to $49B from $50B, mostly due to the impact of the stronger dollar. EPS guidance is unchanged at $4.70-$5. "While economic conditions in the U.S. are modestly positive, the global economy remains relatively stagnant," says CEO Doug Oberhelman.
- About $500M of stock was bought back in H1, and the company intends to repurchase about $1.5B worth in Q3.
- Previously: Caterpillar EPS in-line, misses on revenue (July 23)
- CAT -3.5% premarket
Wed, Jul. 22, 10:22 AM
- Citigroup analysts say BHP Billiton's (BHP -3.4%) FY 2016 guidance for declines in production of oil, coking coal and copper were larger than expected, and the guidance for increased iron ore production was also below expectations.
- While declines were expected due to field decline in oil and lower grades in copper, "it highlights the capital intensive nature of mining and that even $9B of capex does not drive production growth every year," CIti says, as it forecasts copper equivalent production growth of 2% in FY 2017.
- "The beauty of diversification is that when one commodity is down, one of the others picks up the slack. That's not happening right now for BHP," says a mining analyst for Morgans Financial.
- Miners and related companies are hammered in early trading: CLF -13%, RIO -1.9%, VALE -2.5%, FCX -3.1%, OTCPK:AAUKY -3.9%, CAT -2.7%, JOY -1.2%.
Mon, May 11, 8:23 AM
- Caterpillar (NYSE:CAT) has been upgraded at Baird on the belief that the stock may have bottomed as the worst of the mining and commodity deflation cycle appears to have passed.
- Analyst Mig Dobre raised his rating to outperform from neutral, and boosted his stock price target to $101 from $80.
- Dobre feels the decline in commodity prices over the last several years has been on par with the 1980's bust, and that anything worse would resemble the cycle seen during the Great Depression, which would be unlikely given the significant stimulus from central banks around the world.
- Caterpillar's stock has underperformed the S&P 500 in each of the past four years through 2014, although it has never underperformed the broader market for five-straight years.
- Dobre also upgraded Joy Global (NYSE:JOY) to outperform from neutral, and raised the stock price target to $62 from $45.
- CAT +0.8%, JOY +0.8% premarket
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.
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