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Last Update: 28-Jan-13 07:53 ET
Caterpillar shares little changed following beat on earnings
Caterpillar (CAT) reported fourth quarter earnings of $1.91 per share, excluding the $580 million ($0.87/share) goodwill impairment charge, $0.19 better than the Capital IQ consensus Estimate of $1.72, while revenues fell 6.8% year/year to $16.07 billion versus the $16.2 bln consensus. The impact of changes in dealer new machine inventories lowered sales by about $1.4 billion as dealers reduced inventories about $600 million in the fourth quarter of 2012, compared with an increase of about $800 million in the fourth quarter of 2011. The company issued downside guidance for Q1, sees Q1 revenues of down more than $2 billion from 1Q12 ($15.98 billion) versus the $15.09 billion consensus Estimate. "While we are not providing a specific sales and revenues and profit outlook for the first quarter of 2013, we are expecting that sales and revenues in the first quarter are likely to be significantly lower than the first quarter of 2012. The middle of our full-year outlook for sales and revenues is about $2 billion below 2012 sales and revenues. We expect that sales and revenues will decline more than $2 billion in the first quarter of 2013 compared with the first quarter of 2012. Much of the expected decline in first-quarter sales is a result of the continuation of reduced production as dealers are expected to continue to lower their new machine inventories. We expect that dealer inventory reductions will be negative to sales in the first quarter of 2013, while in the first quarter of 2012 dealers increased inventory which benefitted Caterpillar sales. Profit is also expected to be significantly lower in the first quarter of 2013 than in the first quarter of 2012—a result of lower expected sales and the negative cost impact of continuing low production levels and declining inventory."
The company issued guidance for fiscal year 2013 with EPS of $7.00-9.00 versus the $8.61 consensus and lowered fiscal year 2013 revenues to $60-68 billion versus the -5 to +5% year/year to approximately $62.7-69.3 billion versus the $64.94 billion consensus. Price realization is expected to be positive to profit in 2013, but the impact is expected to be about offset by higher depreciation and an unfavorable sales mix. "We are optimistic that recent positive economic indicators suggest economic growth in 2013, but we remain cautious about how quickly economic improvement will translate into higher sales and revenues." 2013 Economic Outlook: World economic conditions, while improving, are still relatively weak. Indicators improved in many countries in late 2012, suggesting better prospects for economic growth in 2013. In the large economies, we expect some improvement in the United States and China, and a continuation of economic uncertainty in Europe. Overall, we expect the world economy will begin the year with weak growth and improve as 2013 unfolds. We anticipate overall world economic growth of at least 2.5 percent—a small improvement from our estimate of 2.3 percent for 2012.
The company issued guidance for fiscal year 2013 with EPS of $7.00-9.00 versus the $8.61 consensus and lowered fiscal year 2013 revenues to $60-68 billion versus the -5 to +5% year/year to approximately $62.7-69.3 billion versus the $64.94 billion consensus. Price realization is expected to be positive to profit in 2013, but the impact is expected to be about offset by higher depreciation and an unfavorable sales mix. "We are optimistic that recent positive economic indicators suggest economic growth in 2013, but we remain cautious about how quickly economic improvement will translate into higher sales and revenues." 2013 Economic Outlook: World economic conditions, while improving, are still relatively weak. Indicators improved in many countries in late 2012, suggesting better prospects for economic growth in 2013. In the large economies, we expect some improvement in the United States and China, and a continuation of economic uncertainty in Europe. Overall, we expect the world economy will begin the year with weak growth and improve as 2013 unfolds. We anticipate overall world economic growth of at least 2.5 percent—a small improvement from our estimate of 2.3 percent for 2012.
