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Caterpillar Inc. (CAT)

  • Thu, Mar. 5, 7:44 AM
    • Joy Global (NYSE:JOY) -7.2% premarket after posting a sizable FQ1 earnings miss, a 16% Y/Y decline in revenue, and cutting guidance for FY 2015.
    • JOY now sees 2015 EPS of $2.50-$3.00, down from its previous guidance of $3.10-$3.50, and revenues of $3.3B-$3.6B, below an earlier outlook for $3.6B-$3.8B.
    • JOY says the outlook for global growth in 2015 has been reduced in recent months as the slowing trends seen in H2 2014 have continued.
    • Q1 bookings fell 19% Y/Y to $700M as equipment orders fell 30%: "Our direct service business remains a critical and stabilizing force for us, but we have recently seen slowing in the bookings profile as maintenance and rebuild schedules are stretched. There has also been evidence of commodity production declines in some end markets that is also impacting our service bookings."
    • Says it is now aiming for $50M in savings from cost reductions this year vs. its previous goal of $25M in savings.
    • CAT -1.2% premarket.
    | 1 Comment
  • Tue, Feb. 24, 3:23 PM
    • Caterpillar's (CAT +1.2%) potential liabilities for additional U.S. taxes and penalties could be much larger than the $1B the company recently disclosed, according to a WSJ report that cites various tax experts.
    • Last week, CAT said the IRS objected to the way it calculated taxes owed on sales of replacement parts for equipment outside the U.S. related to the company’s 1999 creation of a Swiss subsidiary, which has yielded ~$300M/year in tax savings.
    • The IRS has a strong case for "going after" CAT, since the creation of the Swiss unit appeared to have no business purpose other than reducing taxes, according to one tax law professor who testified last year at a Senate hearing on CAT’s tax practices.
    • Lacking sufficient information, Wall Street analysts have not yet adjusted earnings forecasts for potential costs of the tax dispute.
  • 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. 17, 6:19 PM
    • Caterpillar (NYSE:CAT) discloses that U.S. authorities are investigating the movement of cash among its U.S. and foreign subsidiaries, receiving a grand jury subpoena from the U.S. District Court for Central Illinois last month.
    • The filing provides no further details, but CAT says it does not believe the investigation will have a material adverse effect on its financial position.
    • CAT also says it is in talks about a possible resolution of another federal investigation, involving its Progress Rail subsidiary.
  • 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.
  • Wed, Jan. 28, 2:29 PM
    • Caterpillar (CAT +0.9%) shares rebound slightly from yesterday’s selloff, as J.P. Morgan upgrades CAT to Neutral from Underweight while seeing limited likelihood of further declines.
    • JPM says its Neutral rating is based on CAT’s exposure to oil and gas, both direct and indirect, which seems to have entered a prolonged period of volatility at best and perhaps a long-term down cycle; the firm cuts its estimate for 2015 earnings to $4.80/share from $6.70, as CAT said yesterday it expects EPS of $4.75 on revenue of $50B for the year.
    • Stifel analysts maintain their Buy rating but cut their price target to $93 from $122, Barclays keeps its Overweight rating but lowers its target to $90 from $101, and UBS cuts its target to $81 from $84 as it expects headwinds from oil and gas to extend into 2016.
  • Tue, Jan. 27, 5:57 PM
    • The oil price decline is the most significant reason Caterpillar (NYSE:CAT) expects a 20% cut in its earnings this year, particularly for its energy and transportation unit which makes compressors, pumps and turbines for oil and natural-gas companies, and is a negative for CAT’s construction business in oil-producing regions, CEO Doug Oberhelman said in today's earnings call.
    • A stronger dollar also is hurting sales and will hurt U.S. manufacturers, although CAT's global production footprint would help offset the impact, the CEO said.
    • “We are hopeful the guidance is conservative enough to provide a base level expectation for 2015, but it was a surprise even against lower expectations,” says William Blair analyst Larry De Maria.
    • If 2015 sales fall the company expects, it would be the first time since the Great Depression that CAT has experienced three consecutive years of falling revenues.
    • Earlier: Caterpillar plunges on profit drop, lowered outlook
  • 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%.
    | 1 Comment
  • Tue, Jan. 27, 9:10 AM
    | 1 Comment
  • 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
  • Tue, Jan. 27, 7:33 AM
    • Caterpillar (NYSE:CAT): Q4 EPS of $1.35 misses by $0.20.
    • Revenue of $14.24B (-1.1% Y/Y) beats by $60M.
    • Shares -4.7% PM.
    • Press Release
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  • Mon, Jan. 26, 5:30 PM
  • Mon, Jan. 26, 9:46 AM
    • Caterpillar (CAT -0.6%) reports that its retail machines sales were down 12% Y/Y in the three months ending December, with resources industries down 22% and construction industries down 9%.
    • Energy & transportation retail sales in the same period were up 22%.
    • SEC Form 8-K
  • Fri, Jan. 16, 12:26 PM
    • Caterpillar (CAT -1.3%) is weak as Jefferies predicts it is among the machinery-related stocks most likely to disappoint investors with Q4 results, and that the company may may cut its 2015 revenue forecast from "flat to slightly up" to "flat to slightly down."
    • Jim Chanos, who is short the stock, reiterated his negative view on CNBC this morning, citing increasing challenges in CAT's energy and mining businesses.
    • He also sees trouble ahead for big multinational energy companies, mentioning in particular Exxon (XOM +1.7%) and Chevron (CVX +1.3%) and expecting substantial cuts to their outlooks.
  • Tue, Jan. 13, 9:20 AM
    • Caterpillar (NYSE:CAT) will report Q4 results on Jan. 27. The conference call is scheduled to begin at 6:30 a.m. CT.
    • Consensus view is revenues of $14.2B.
    | Comment!
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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.