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January 24, 2014
14:08 EDTCATEarnings Preview: Caterpillar expects Q4 profit lower than Q3
Caterpillar (CAT) is expected to report fourth quarter earnings on Monday, January 27 before the market open with a conference call scheduled for 11:00 am ET. Caterpillar is a manufacturer of mining and construction equipment. EXPECTATIONS: Analysts are looking for earnings per share of $1.28 on revenue of $13.64B, according to First Call. The consensus range for EPS is $1.20-$1.39 on revenue of $13.16B-$14.11B. LAST QUARTER: Caterpillar reported Q3 EPS of $1.45 against estimates for $1.67. Q3 revenue came in at $13.42B against estimates for $14.32B. On its Q3 report, the company lowered its FY13 EPS and revenue guidance, citing concern about a reduction in mining orders. Caterpillar cut its FY13 EPS view to $5.50 from $6.50, compared to a consensus at the time of $6.20. Its FY13 revenue view was lowered to $55B from $56B-$58B, versus a consensus at the time of $56.46B. The company also lowered its FY13 guidance following both its Q1 and Q2 reports. Caterpillar forecast FY14 sales of $52.25B-$57.75B, compared to expectations of $58.65B. The company said the 2014 outlook reflected uncertainty, and it expected to take "deeper actions" to improve its cost structure and balance sheet. On January 24, the company reported dealer machinery sales were down 9% in the past three months. STREET RESEARCH: Street research has been mostly negative in the weeks leading up to Caterpillar's Q4 earnings report. On October 24, JP Morgan downgraded Caterpillar to Neutral from Overweight, citing execution and rising headwinds following the company's weaker than expected Q3 results. The firm lowered its price target for the shares to $90 from $105. On November 7, ISI Group downgraded Caterpillar to Neutral from Buy. On November 25, BofA/Merrill upgraded Caterpillar to Buy from Neutral. The firm believed Caterpillar's Power System segment was an overlooked source of 2014 operating earnings and would help support profit of at least $4.50-$5.00 per share. BofA placed a $100 price target on the shares. PRICE ACTION: Caterpillar’s shares have traded modestly higher since the company's Q3 results, but are down over 10% from year ago levels. In afternoon trading ahead of Monday's Q4 report, Caterpillar’s shares are down over 2.5%.
News For CAT From The Last 14 Days
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October 6, 2015
11:26 EDTCATCaterpillar October calls active
Caterpillar October weekly 70 and 70.5 calls are active on total call volume of 18K contracts (7K puts) on takeover chatter. October weekly call option implied volatility is at 34, October is at 31, November is at 32; compared to its 52-week range of 15 to 41. Active call volume suggests traders taking positions for upside price movement.
September 30, 2015
16:26 EDTCATCaterpillar announces price action of 0%-2% worldwide on most machines
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September 28, 2015
07:00 EDTCATCaterpillar shares attractive after selloff, says Deutsche Bank
Deutsche Bank analyst Vishal Shah says that after dropping 7% since the 2015 guidance cut, shares of Caterpillar are attractive. Earnings per share will tough at $3.75 in 2016 and rebound to $4.10 in 2017, Shah tells investors in a research note. He keeps a Buy rating on the stock with an $80 price target.

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