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Caterpillar Inc. (CAT)

  • Thu, Mar. 19, 11:30 AM
    • Caterpillar (CAT -1.7%) says its global sales fell 11% for the three-month rolling period ending in February compared to a year ago; the rolling period ending in January has dropped 14% Y/Y.
    • Energy and transportation retail sales for the three-month rolling period rose 17%, while construction and resources segments posted respective declines of 11% and 12%, results that likely do not bode well for Q1 sales totals.
    • Total machine sales fell 2% in North America and more than 10% in every other geographic region; resource industries segment sales fell everywhere except Asia/Pacific, which posted a gain of 37%; sales in the Europe, Africa and Middle East region fell 42%, and North American sales slipped 7%.
  • Thu, Feb. 19, 12:47 PM
    • Caterpillar (CAT -1.5%) is lower after disclosing that retail machine sales fell 14% globally for the three-month rolling period ending in January compared to the prior year period; the Latin America region posted the largest move with a 36% decline, Asia turned in the second worst performance with a 19% drop, and North America sales fell 5% Y/Y.
    • Meanwhile, WSJ examines the growing list of federal investigations and inquiries that is becoming a serious embarrassment for CAT, with the latest a federal grand jury investigation in Illinois involving cash transfers within the company; others involve a probe in California focused on railcar repairs, SEC and IRS inquiries into CAT's tax-reducing strategies, and an SEC probe into the company’s accounting related to the 2011 acquisition of Bucyrus.
  • Tue, Feb. 10, 3:14 PM
    • Jim Chanos' dislike of Caterpillar (CAT -0.8%) stock is well known (I, II) but Axiom Capital's Gordon Johnson wishes that "someone please tell Jim Chanos that Joy Global (JOY -2%) is worse off than Caterpillar."
    • With ~65% of JOY’s sales linked to the sale of equipment for coal mining (with a heavy weighting to the U.S. coal market) vs. less than half this amount for CAT (exacerbated by CAT’s far less direct exposure to the U.S. market), the analyst thinks JOY’s fundamentals stand to suffer significantly more than CAT as several headwinds come to fruition over the next year.
    • Given a once-in-a-decade correction lower in commodity prices, Johnson firmly believes the next 12 months will bring far more than the typical downward seasonality for JOY, as he reiterates his Sell rating and $28 stock price target.
  • Tue, Jan. 27, 3:58 PM
    • Cummins (CMI -3.8%) is downgraded to Market Perform from Outperform at First Global despite delivering a respectable performance for the final nine months of 2014.
    • CMI’s industrial engines are highly exposed to the construction and mining industries which are being impacted by weak capital spending in China and other emerging markets, the firm says; also, demand in the Chinese and Brazilian truck markets remains weak.
    • At 13.9x estimated CY 2015 earnings, CMI shares already trade at a moderate premium to peers such as Caterpillar, First Global adds.
    • CMI and other equipment manufacturers are broadly lower following Caterpillar's (CAT -7.2%) disappointing quarter: JOY -5.3%, MTW -5.1%, DE -2.7%, CNHI -1.9%.
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  • Tue, Jan. 27, 9:10 AM
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  • Tue, Jan. 27, 8:29 AM
  • Tue, Jan. 27, 8:08 AM
    • Q4 net profit of $757M, down nearly 25% from $1.03B a year ago. Excluding restructuring costs, EPS was $1.35 (compared with $1.68 a year earlier) and missed EPS expectations of $1.55.
    • Revenues decreased slightly, falling to $14.2B from $14.4B in the fourth quarter of 2013.
    • The company said continued weakness in commodity prices - particularly oil, copper and coal prices will weigh on its sales in 2015.
    • Caterpillar (NYSE:CAT) expects to post per-share earnings of $4.60 per share (or $4.75 per share excluding restructuring costs) on revenue of $50B (below its previous outlook of $55B) for the year. Analysts had projected $6.67 a share in earnings on $55B in revenue.
    • CAT -7.4% premarket
    • Q4 results
  • Mon, Jan. 5, 9:05 AM
    • Caterpillar (NYSE:CAT) -2% premarket as J.P. Morgan downgrades shares to Underweight from Neutral with an $80 price target, down from $95, citing the machinery maker's direct exposure to oil and gas and indirect exposure to mining, U.S. construction and emerging markets.
    • JPM says CAT's exposure to oil and gas totals $6.5B, or ~12% of total revenue, as it supplies turbines to offshore rigs, as well as reciprocating engines and transmissions for on-site drilling.
    • The firm says U.S. construction equipment demand since 2010 has been strongly correlated with the expansion of fracking, and thus expects to see a slowdown in equipment demand in 2015.
    | 1 Comment
  • Nov. 21, 2014, 9:49 AM
    • Caterpillar (CAT +3.5%) jumps at the open after China makes a surprise interest rate cut and the stock is initiated with a Buy rating and a $122 price target at Stifel,
    • Stifel says CAT's cycles have two acts and sees a back-half recovery this cycle with a North American focus; the firm also believes seasonal tailwinds, a rebound in commodities on global GDP optimism, and prolonged easy Fed policy should favor CAT shares.
    • The firm anticipates a North American heavy construction cycle, as well as oil and gas, as the catalysts for a late cycle recovery to fill the void that mining has left.
    • JOY also +3.5%.
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  • Oct. 27, 2014, 12:24 PM
    • Caterpillar (CAT -1.5%) climbed 4.6% last week after its Q3 earnings easily beat Wall Street consensus, but Raymond James analyst Theoni Pilarinos thinks this is not the time for investors to chase the stock.
    • CAT deserves credit for right-sizing inventory, bringing production levels in-line with demand, maintaining a solid balance sheet and generating strong cash flow funding $5.4B YTD in share buyback and dividends, but management's forecast for flat 2015 sales growth prompts the firm to lower its numbers accordingly, and Pilarinos believes the stock will be range-bound until end markets improve.
    • AMong other big machinery makers: JOY -3.4%, MTW -1.7%, DE -0.8%.
    | Comment!
  • Oct. 23, 2014, 3:17 PM
    • Caterpillar (CAT +5%) helps power the Dow higher after crushing Q3 earnings estimates and raising its full-year earnings guidance to $6.50/share.
    • Citigroup’s Timothy Thein says most of the surprise came from operations, not from financial engineering, adding that "given the worsening global macro environment and sharp correction in most commodity markets, investor sentiment was cautious heading in to results.”
    • In his first comments on 2015, CEO Doug Oberhelman said in today's earnings conference call that CAT expects sales to be flat to slightly higher as world economic growth remains slower than the company would like but added there is a "reasonable likelihood" it could improve next year.
    • The CEO says the recent drop in oil prices is a negative for CAT as a major supplier of engines to the industry, but the company would be fine if oil prices are in the mid-80s; much of CAT’s energy-related business is tied to natural gas compression and oil and gas pipelines, which are less affected by crude price fluctuations.
  • Oct. 23, 2014, 8:13 AM
    • Net income of $1.02B, or $1.63 a share, vs. $946M, or $1.45 a share, in the same quarter a year ago.
    • Revenue by segment: Construction Industries -2%; Resource Industries -19%; Energy & Transportation +13%; Financial Products +5%; Other +10%.
    • Revenue by region: Sales increases in North America +15%; Latin America -21%; Asia/Pacific -7%; EAME flat.
    • The company repurchased $2.5B of common stock during the quarter. The repurchase is part of the $10B stock repurchase authorization approved by the Board of Directors in the Q1 of 2014.
    • Restructuring costs of $81M, with an after-tax impact of $0.09 per share.
    • The company now expects 2014 sales and revenues to be about $55B, the middle of its previous outlook range of $54-$56B.
    • The revised profit outlook is $6.00 per share, or $6.50 per share excluding $450M of restructuring costs compared to the previous $5.75 per share, or $6.20 per share excluding $400M of restructuring.
    • Q3 results
    • CAT +4.2% premarket
  • Oct. 23, 2014, 7:32 AM
    • Caterpillar (NYSE:CAT): Q3 EPS of $1.72 beats by $0.36.
    • Revenue of $13.6B (+1.3% Y/Y) beats by $410M.
    • Shares +2% PM.
    • Press Release
    | 1 Comment
  • Sep. 19, 2014, 2:28 PM
    • Caterpillar (CAT -1.7%) says worldwide machinery sales by its dealers fell 10% for the three-month period ended in August, marked by a 29% plunge in Latin America sales; global sales had dropped 9% in the May-July period and 10% in April-June.
    • North America was the only region where sales were up in the latest rolling period as sales rose 8%, but that was down from 11% growth in July and a 14% rise in June.
    • CAT's worldwide mining equipment sales fell 33% Y/Y, while construction equipment sales fell 1%; a 12% sales increase in its North America construction division was offset by a 23% drop in Latin America and a 10% decline in Asia/Pacific.
    • The lone bright spot was a 4% sales increase in its energy and transportation equipment division.
    • Mining equipment peers also are weak in today's trade: JOY -2%, MTW -3.7%, TEX -1%.
  • Aug. 11, 2014, 10:28 AM
    • Terex (TEX +3.4%) shares could rise up to 30% over the next year, according to a weekend report in Barron’s, which cited four major factors offering strong investment potential.
    • A pickup in big construction jobs - office buildings, hospitals, schools, etc. - which tends to lag behind a home-building recovery by about two years, now seems afoot, which should be good news for TEX and other heavy-metal specialists.
    • TEX is poised to benefit from efficiency moves; years of acquisitions have left it with, for example, more than 70 accounting departments worldwide, a number management says it can reduce to eight.
    • TEX also has amassed a full suite of automated products for stacking and unloading cargo on giant ships - a good business to be in, because the Panama Canal is getting a major capacity increase over the next two years.
    • Finally, TEX shares are cheap, trading at 13.8x this year's earnings forecast vs. Caterpillar (NYSE:CAT), which trades at 16.4x.
    | 1 Comment
  • Jun. 5, 2014, 3:59 PM
    • Joy Global (JOY +6.7%) powers to its highs of the day after reporting FQ2 earnings that reflected the global mining equipment slowdown but topped low expectations and backing its FY 2014 guidance.
    • JOY said in its earnings conference call that its deal with Mining Technologies will add to its underground hard rock mining growth prospects.
    • Joy also sees growth in the oil sands market, particularly in Canada, which it said represents the largest unconventional source of oil production over the next 20 years.
    • Global mining peers also are higher: CAT +2.6%, VALE +1%, BHP +0.7%, RIO +0.7%.
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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.