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CAT Slaughtered With Epic Q3 Revenue, Earnings Miss And Guidance Cut: Sees "Good Deal Of Uncertainty Worldwide"
With every passing quarter, Caterpillar, perhaps the last truly industrial company in the epically misnamed Dow Jones (non)-Industrial Average, provides an ever clearer answer to the question we posed this past July, namely "Is CAT Nothing But The Dow's Most Overpriced Dog?" The most recent affirmative response came moments ago when the company announced Q3 earnings which were for lack of a better word, disastrous: EPS came at $1.45 on expectations of $1.67, revenues missed by a whopping $1 billion, when the sales print $13.4 billion missed expectations of $14.47 billion - perhaps the biggest top-line miss in the company's history since the Lehman bankruptcy. But it was the guidance that is slaying the stock right now: "The company has revised its 2013 outlook and now expects sales and revenues to be about $55 billion, with profit per share of about $5.50. The previous outlook for 2013 sales and revenues was a range of $56 to $58 billion with profit per share of about $6.50 at the middle of that range." But don't worry: despite our continuous warnings about the sad state of this company the trend, it is only "transitory", and any minute now thing may get better. Unless they don't.
"This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year. That is a 17 percent decline from 2012, with about 75 percent of the drop from Resource Industries, which is principally mining. We expect Resource Industries to be down close to 40 percent for the full year and Power Systems' and Construction Industries' sales to each be down about 5 percent," said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.
Not only is mining down from 2012, the demand for equipment has been difficult to forecast. Orders for new mining equipment began to drop significantly in mid-2012 and have continued at very low levels. As a result of weak orders and feedback from end users, the sales and revenues outlook provided in January of 2013 included a decline in mining sales. At that time, based on strong mine production for many commodities, the company's outlook expected that order rates would improve later in 2013.
"Unfortunately, order rates have not picked up much despite continuing strong commodity production. That has caused us to ratchet down our sales and revenues outlook as we have moved through 2013," Oberhelman said.
And the outlook:
From an economic standpoint, the company expects better world growth in 2014. However, significant risks and uncertainties remain that could temper global economic growth. The direction of U.S. fiscal and monetary policy remains uncertain; Eurozone economies are far from healthy and China continues to transition to a more consumer-demand led economy. In addition, despite higher mine production around the world, new orders for mining equipment remain very low. As a result, the company is holding its outlook for 2014 sales and revenues flat with 2013 in a plus or minus 5 percent range. The company expects sales growth in Construction Industries, relatively flat sales in Power Systems and a decline in Resource Industries' sales.
"There are encouraging signs, but there is also a good deal of uncertainty worldwide as we look ahead to 2014, and our preliminary outlook reflects that uncertainty. Despite prospects for improved economic growth and continued strong mine production around the world, we won't be increasing our expectations for Resource Industries until mining orders improve. We can't change the economy or industry demand, but we've taken many actions to align our costs with the environment we're in currently. While we've done much already, we're not finished and expect to take deeper actions to improve our cost structure and balance sheet. We're not seeing bright spots in mining yet, but the turnaround will happen at some point, and when it does, we'll be ready to respond," Oberhelman added.
Sure. "At some point" it will happen. Just not now and not for the foreseeable future. In fact, as long as the Fed is monetizing, kiss any recovery goodbye.
But that's ok: who needs revenues, and certainly earnings, when all Bernanke needs to do is crank up the P/E multiple expansion by one more notch. And all shall be well until next quarter.
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Entering the shutdown phase of Obamacare....not sure we can even assure 29.5 hour jobs at this point.
Just on Drudge....
300,000 LOSE HEALTH PLANS IN FLORIDA
Don't let the CAT out of the bag.
Tylers
Morning humor
this is a legit and new Obama Care advert
Deborah's Covered. You Can Be Covered Too!http://www.youtube.com/watch?v=VpLct6WJOSE
"and the website is easy to use"
As soon as Sebelius and her Oboss fix the HellCare.gov, they should start building and selling Heavy Machinery. ;-)
Looney
Yes, let's by all means piss on one of the last companies in the world making real products, instead of running pyramid schemes, or pushing fraudulent paper around in a circle.
Cat will be around decades after no one remembers Priceline, Herbalife, or Netflix.
Yes, but they'll be selling horses.
CAT has been making money for the simple fact as gov't pile on debt, they force the faux economy to run. All those IPads, McMansions and other uncessary crap people are buying instead of viable investments as they should.
hahaha, fucking classic.
branded with a CAT logo on their ass of course.
kaiserhoff
I spent 30 yrs at CAT and retired recently. Yes CAT does actually manufacture products.
However, the previous CEO Owens and his replacement Oberhelman act as though a share of CAT stock is their product and Wall St is the customer. The annual earnings report is the driver for "long term" planning.
The people who actually buy and use the yellow machines are nearly forgotten.
The end result is a focus on cost cutting. Every large organization can and should cut costs. But CAT crossed the line and cost cutting has seriously affected product quality.
I made a presentation to justify a manufacturing capital expenditure. The accountant stated "It's a shame all of this engineering and manufacturing gets in the way of making money." That sums up the current attitude from the top at CAT.
Not a good long term strategy.
It is unfortunate. It's also why we see so many Komatsu, Hitachi, Kobelco, and Kubota machines here.
"Co-Dependant co-pay an an annualized split income with a drug plan. Fuck yeah, makes me wet. Gotta get me some of that." <fap fap fap>
- porn for Americans.
Yea, those fucktards have really cranked up the marketing machine.
I'm glad I'm not paying for all that prime-fucking-time ad space.... /smarc
Hey at least those videos are getting 77 down thumbs to 2 ups. I think people kknow they're getting cornholed.
We have been assured that uncertainty doesn't matter. I can't understand why these businesses keep blubbing about it.
CAT was done for me, when early on, they "Were on Board" with Obamacare doing a photo-op at one of their plants and trying to sell this pig. They were one of the first major companies, besides AARP, to support and embrace this idiotic Bill.
CAT was done right then and there. They sold their soul and went to the evil dark side and now they are done until someone with moral character and commonsense takes over the helm there.
CAT = Pussy G(al)ore
And another 270,000 in California.
http://t.nbcnews.com/health/thousands-get-health-insurance-cancellation-...
This guy did a great cost comparison on presently available HC plans and the more expensive ACA plans. http://bit.ly/1bQpzYQ
So basically you have over a half a million people that now realize Mack Daddy the Pimp Barry lied to them.....and that's just today.
The good news is that it's Thursday....if we can make it one more day into the weekend maybe no one else will notice. I'm just hoping MSNBC can step up here and get the disinfo out. Thank goodness those guys don't mind looking like idiots.
It's Wednesday - just FYI. Don't want you to miss any meetings.
Well dammit.....it really felt like Thursday. I totally don't have a plan now.
Anyone else got anything?
Yea, dis-info? I'm sure the printing presses have been running non-stop turning out more Psyche Warfare False Narrative scripts for mass PsyOp consumption.
Wait till the Friday news dump when they think the sheep are assleep for the real news.
They don't have a camel at their workplace....
What day is it????
It's Thursday in Japan and portions of Asia.
Difference is modivation.
You can work 29.5 hours for someone else doing something someone else believes is work at their minimum rate. Or you can work as much as you like for yourself and still be under the same expectations. Except with the distinct difference of putting a personal flourish, set the hours within reason and set the value of your time against a project.
Doesn't matter if it's washing windows or ASIC programming either.
I for one welcome Obamacare. The income gap will now widen, inflation (thanks to Fed handjobing banks) is going to crush the average person thanks to their new reduced hours. Hopefully this will push up the revolution time-table a few years. Get your pitchforks, torches, and rope. Guillotines will not be on sale 'til next week.
I have a slightly wore cutting edge from an old D-8 dozer in my scrap pile. I think I can make at least 4 guillotines with it. A good family project for me and the kids this weekend.
2.95 hrs.typo.
That's a sick thought, and close to the truth.
I know well educated people working 4 hour shifts. Work out the cost benefit on that crap.
I assume Calamity Janet has been made aware of CAT's earnings report.....
She's never worked an honest day's work in her life and wouldn't know what the company actually does or what the equipment CAT produces is for. The bunch of them are severely disconnected from what any of these companies do. To these people so high up its all 'magic', just like a light switch is 'magic'.
btw Bullish...CAT in the shitter, bullish. And in a week when they revise the numbers, it'll still be bullish.
when is the lat time you saw a piece of CAT equipment on the job anyway?
Kubota is etting the standard these days
pretty brisk sales...check it out
Kubota equpiment runs like shit in Canada. Once the European and Asian tinker toys meet a single Canadian winter that's all they give back. The russian equipment is okay, they still haven't figured out how to use an engine or build a frame for working loads though. The stuff is tonka tough, just really poorly designed for work.
All the North American equipment is built to do one thing. Fix in field. That is any one with tools can pick up a manual and fix it where the equipment drops dead. The European and Asian garbage does one thing. Wait for a tow, then wait for the equipment to be completely disassembled.
Besides all the stuff coming out of Japan is severely radioactive. It's not just the fish you shouldn't be eating. Metal absorbs radioactivity like a sponge. So consider that anytime you get in any Japanese brand.
Any time I've used kubota equipment, the hydraulics have been terrible compared to american counterparts.
CAT had the benefit of being in the right place at the right time, the era of big steel. Designed to the requirement of big things.
I have a Kubota that was built in the late 70s and it still runs like a sewing machine, everything works, and it doesn't leak.
I had an OTC Japanese 'sewing machine' from the late 80's that could take me to 280km/hr, and like your Kubota it never leaked either.
Right on. You are one of the few that are happy with them.
It's the difference between spending $3000 on a John Deer mower or buying a Honda for $1800. I had to learn the lesson twice where my brother in law only spent once because his old man has a john deer from the 60's still running. I didn't spend the 3k because I was rich, I spent the 3k because I learned I don't like paying the price in parts and service after buying something every year. Cat and John Deer keep similar philosophies in mind. Build it well, you'll be back later for another one because it wasn't a wallet emptying device.
In terms of working equipment that you need to use heavily, I'm not sure a business buys equipment to have it fail on them. There's just a well established baseline that US equipment is well built. It's one of the few things that's been messed with and the States have done well at. Design for purpose when it's needed, design for speed when it's wanted.
Seriously those giant road pavers, a single piece of gear that can strip and drop asphalt cost well over a million a piece. The tires on them are a down payment on a house. Why?
they have to be tough enough to carry the weight of an entire road. Level it. Drop burning hot pitch for 12 hours a day for six months. Then the body has to withstand 6 months of cold storage without crumbling like cheap plastic. There just isn't the same level of quality for the cost benefit in the rest of them. There just isn't. You can see that be repeat business.
But again, need good quality high grade oil to keep all those motors running. Not shit tier bongo shale oil. The oil filters in these machines are the average person's paycheck. The machine doesn't pay for itself when it's not running. All sort of factors to weigh when looking at industrial equipment. They've never been built to be beautiful except to the guys back's being saved because of them.
All construction sites around my area run CAT.
I can't think of one either. Every one just knows better than to fix something that doesn't need fixing and will eventually pay you back. CAT doesn't offer any guarentees on that obviously, that's just the way the business works and it's understood.
As we all know, this is not a CAT issue, it is a dead world economic tsunami.
Did CAT say not to worry because BernanQE would print up some global demand in the form of multiple expansion?
Copper is saying no.
bankrupt the coal miners, bankrupt the gold/silver miners, what do you expect?
One of the great failures of controlled economies was the last two years of paper price controlling many goods below production costs. The CBs are personally responsible for the jobs lost in mining as well as all of systems gold that had to be used to fill the supply gap. But that is a one trick pony. The miners will adjust to sell into different channels that do not rely on wall street paper. They can already get an extra 10% by selling to India.
"Missed it by >-------------------THAT---------------------< much." - Maxwell Smart
but but CAT does not tell us anything about the global economy.
the companies that truly show how our economy is doing are goog, fb, nflx, amzn, and these are greatly run companies.
who cares about wmt, cat, ibm, nflx and goog and fb will lead us to a golden age in growth
YEP,
just keep feeding me the fucking KOOLAIDE do any of you koolaide wait-staff understand the the GOOG, FACEbook, nflx, amazn, and twit-fuck is fucking NSA CIA spyware, ... do any of you actually think this shit has a tomorrow?
Me thinks that all remains of ZH is pimps for the NSA machine, but on the global scale this shit is FUCKED big time.
Folks will always need to move dirt, but their children don't need to post photo's of their genitals.
Well said, Sir.
It will be an honor to meet you at the FEMA re-education camp.
Anthony Weiner
you think he needs to move dirt?
but he does apparently need to post pictures of his genitals, so therefore your entire premise is incorrect
Excellent point. If you're worried about the future I'd get off the tech bubble and bunker in CAT, DOW, NUE, X, AA, MT, JNJ etc.. Oil companies are usually safe but who knows how the Mid East is going to shake out. OPEC could break and the Saudis May have to dump even more to afford the price of domestic stability.
We should all be nervous. The bellweather GRPN seems to be showing some weakness.
Bellwether schmellwether ... CAT is sooo real economy.
pull yourself up a one year kubota (KUBTY) chart
kubota is what is on the job these days
you guys need to get dirty once in awhile and get down in the trenches and see what people actually use
logic of ivory tower & cozy office decision makers
=
We'll "service" the entire economy with jobs that amount to nothing more than pushing paper, or banking on people's ignorance and faith in the integrity of the system (fractional banking) to drive a "super-power" forward into the 21st century.
Misapplied ambition and views developed in offices far away from reality have shaped current day america.
Here is a law:
Produce useful shit, or die.
Either you have minds that design and draft the blueprints, and you need the grunts to make the shit--all in a unified system. But yes, you wanted globalism, you've got it. Might as well drop the entire fucking charade now and stop taxing us on national taxes when the country can't even offer opportunity to people with a drive.
Aslo see: the flaws of idealistic pie-in-the-sky capitalism.
Pretty soon, the only servicing we'll do is servicing one another.
BA beats...should offset dow damage
BA beats due to planned obselscence strategy with 787, parts & repair segments booming
It was a glitch inthe Algos. The headline "787 layoffs" was confused with "787 takeoffs" and the Algos went ape$hit.
Pffft. They only missed by a billion. The Bernanke spends that on MBS by mid morning coffee.
Saudi Arabia severs diplomatic ties with US over response to conflict in Syriahttp://www.dailymail.co.uk/news/article-2472680/Saudi-Arabia-severs-dipl...
Good work Obummer. Who cares about a Petrodollar anyway. /sarc off
They were just biding their time.Any excuse would do.
The end of the petrodollar is signed ,and sealed.Just waiting on delivery.
Can we have an update on Russian, and Chinese deployments please Tyler ?
We need an overview of the GO board.
@ TomGa,
The Petro Dollar will soon be useless,. However, a BRIC or Yawn gold backed currency perhaps is more the Saudi's taste.
A little OT, but speaking of non-dollars:
China, Singapore to allow direct trading between currencies
http://www.channelnewsasia.com/news/business/china-singapore-to-allow/85...
Wake me when OPEC starts accepting yuan's from China as payment.
Gee.
Whaa? Butbut biz insider and msnbc told me the economy is improving... I'm so confuzzled ....
the Cat had it coming
With an epic miss and cut in guidance, the stock is only down 3.5%. In normal times, the stock would be down 10% at least. CAT will be down less than 2% by the end of the week. The Fed will continue to print value for CAT. Onwards and upwards - bad news has been banished forever.
Slaughtered cat bounce.
Meanwhile Boeing beats, based on savings from fewer rivets on Dreamliner roof panels, along with cheaper batteries.
and increased parts orders for their 777 line.
I know very little about the DOW, stocks, bonds and finance in general (even though I earned a BA in economics many, many years ago). So my comments will probably look stupid to you guys. The profit per share expectations are declining from 6.5 to 5.5 right? And this years EPS for this year is $1.45 instead of the expected $1.67.
These people are still making a profit.
Maybe not what was "expected" but they still sold equipment and they still made money. Not as much as last year but they STILL MADE MONEY. Maybe I'm brain dead but since when was turning a profit -- any profit a disaster? Especially during a severe recession. And an industrial company no less. Maybe their stock *is* overpriced but at least it's based on real value -- manufacturing as opposed to companies like google which is pretty much based on the internet ( smoke and mirrors if you ask me). I don't get why this report is so bad.
Simple way to look at it. Gas prices are rising, your job is cutting your hours. Your income is still above your expenses, so you "still make money" but gas prices are rising further and food prices just went up. Now are you in a good position, or bad?
You are correct but the point is more showing a continuing degradation of profit margin when so many, including the government, claiming recovery. As profit margin narrows companies typically begin to make adjustments and shed the thing that costs the bottom line the most....that would be the employee.
Additionally CAT is a 'base company'....it hints as to the global situation in mining and construction. If these slow dramatically, it typically signals world economy is slowing dramatically.
Its a -20% miss on the bottom line.
With PEs now levered at bubble bursting heights, its significant.Plus its one of the few American
companies left that make a real product, not paper flim flam.
>> So my comments will probably look stupid
Not to worry, it's a crowed trade. You'll mix in and disappear instantly.
lois lerner late of IRS, missing , chris cox of 08 sec, missing, hank paulson of sec tres 08, missing, free corzine.
this is only an incomplete list of those who could be held and should be held accountable, ben and the fed, jpmorgan, boa and GS...now lets get back to obuma care, and such...the real story of the assination of a nations economy well not something MSM will report..now back to CAT, with mut funds 401ks and no shorting allowed it's stock price is secure, ala fed put.
Do any of you ZH bitches even know how to start a 'cat', do you carry the 'cat' master-key on your key-chain? If not you have no BALLS.
I own 3 CATS
I know CATS, ... I can tell you , that the world moves the fucking dirt with CATS,
Now you bitches tell me that the world has quit moving DIRT? I don't think so, ...
I think you all should go back to pimping penny stocks, but that's all automated now,...
Love and Kisses from the front-line,
My cats move dirt after a crap too.
banzai, perhaps if you were buying 3 new cat's - that might be more to your point. nobody buying is our point.
They're really are few companies with the durability of CAT. So they have hit a rough patch. Like you said, we aren't going to stop moving dirt any time soon. As world economies weaken they will be forced to wither and die or relax restrictions on resource production. CAT will be the first company to heat back up as countries try to dig out of economic turmoil.
Thank You,
So long as there is DIRT, there will be the CAT.
I think that so many pin-heads are so far away from the DIRT they don't have a clue, I have several PHD's and can talk the talk on TECH, but I never lose the ground for that is under our fucking feet.
The MSM likes to talk fucking BRICKS&MORTAR like its fucking 1998. I think we can all agree that when the smoke clears it will return to main-street local life, for the end of 'cheap oil' doesn't allow any other option.
Anybody that moves DIRT any where in world wants a fucking CAT, I don't care if its DUBAI, or Myanmar, or Wisconsin. A CAT is what real men want.
Smart men will buy all they can when its LOW, and stupid men will follow the fucking herd.
IBM is FUCKED, because the NSA spying, I think all of TECH is fucked, well all containing software, and as we all know its rather hard to find software without microcode, so given that there is NSA sperm in every chip by the USA,... its all going down.
But a GOOD CAT has no software, its all steel.
***
Another ITEM is that the USA is fucked all the bridges are fucked and everything, ... Personally as much as I would like to see the USA die, ... it will not happen per my amusement, most likely somebody in the USA will pull the DICK out his mouth and once again rebuild America. When that time COMES it WILL BE CAT.
Again as much as I would like to see the USA die, because they're so they're essentially nation of pathetic fucking assholes, there is a higher power looking out for the USA.
But MAKE not mistake in my FUCKING RHETORIC all fucking USA HIGH-TECH is going down and HARD.
"I have several PHD's and can talk the talk on TECH"..." A CAT is what real men want"...."I would like to see the USA die because they're so they're essentially nation of pathetic fucking assholes"........excuse my abusive language, but, WHY DON'T YOU GO AND FUCK YOURSELF YOU SCROTUM SUCKING PIECE OF SHIT?! and take your ONE WEEK subscription here on ZH with you douchebag.
"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel,"
Rashid bin Saeed Al MaktoumCatepillar's future is all dependant on the idea there is diesel available. Which it isn't, refinery levels are at their lowest in years. Know how I can tell in the real world? All the corn is still in the fields because obtaining diesel is tricky. There was enough diesel handed out at the beginning of the season on quota, at the end of the season there is barely enough to afford trucks on the road.
You know what a Cat Bulldozer is worth with no fuel? Whatever a museum will pay for it.
Long slavery.
Just saying, when the machinery stops, we'll get right back into slavery.
Civilization is just so great, isn't it? Atleast build some fucking 21st century pyramids with the hipster slaves.
The slavery never stopped. You were only given the option to choose a master to work for by a prescribed minimum wage or basic general allowance. Freedom requires more than a job or a voting booth.
Don't confuse freedom with anything currently offered. Someone is going to own your ass and you'll let them.
Ever watch a company take over from the inside. All the people running around sweating that they get to be 'kept'. That's how I know slavery is alive and well.
Most people are beyond the ability to scratch their asses nowadays without retraining and a sign telling them to do something. The modern world is comprised of nothing BUT slavery. Slave to government body. Slave to a corporation. Slave to a clock and someone else's problem that is paid with someone else's debt.
Thank you for that.
I tend to lose focus sometimes, but you've realigned my perspective today. (I know of what you're talking about, but I tend to forget it thorugh the day-to-day routine.)
But a GOOD CAT has no software, its all steel.
Wrong - modern CAT machines are loaded with sophisticated electronics.
Your dozers have oval tracks, cable lift blades and pony engine starters?
I have always liked CAT. They will be one of the first to be federalized by the upcoming facist regime. No, its not here yet, but the WRITING IS definitely ON THE WALL.
Back in November of 2008, CAT was 28 dollars and some pennies for the decimal place. In March of 2009, 23.23 USD.
It topped out at 116 a year and a half ago or so. The foam and froth have settled, but it's all still there.
Caterpillar can manufacture equipment and it ain't jerry-rigged junk. The real deal, a cosmic phenomenon.
The price can go lower, however, much lower. Decline in sales would make that happen
Not only has CAT had epic misses in the last 3 quarters, but they've had declining revenue yoy(and eps) in 4 straight quarters.
Someone loves that little animal, some crazy bastard loves that thing.
Covered short again at a loss.
Maybe there will be a dead-CAT bounce.
Kidding aside, with the economy in the dumps there isn't a lot of demand for heavy equipment.
China should by a bunch of Big Cats and park them inside those empty buildings, come on man, help a brother out.
Death, Taxes, and Higher stock prices are the only "Certainty" ... Those Cats better get with the program.
CAT moves dirt and other things...
Karma, it's a bitch, bitchez...
So last time this happened, CAT revenue cratered the next year. Not much longer to 2014. I hope everyone has their seat belts securely fastened.
My two cents. I live approx to Cat headquarters, and two other of their big plants, so their pain is local here. Have a cousin who got turned out early this year by them, he's freaking lucky, got into a .gov funded "retrain" scam and is doing well, learning pipefitting on the tax teat.
His buddies, not so much. After a wave of retirements and early retirements there have been several purges at Cat. The latest one was a whole bunch of suit and carpet types that went in front of the beltfeds. All the non-union "temp" help has been cut loose. Now corp is looking to cut the union ranks, they've prepared the battlespace with the necessary pre-sacrifices. It's going to get ugly.
Best indicator: The craigslist "for sale" has been freakin popping. Guns, bows, boats, 4x4's, ATV's, motorcycles and Nascar collector series plate sets to be had at bargain rates.
I have a friend who builds mining equipment, and a lot of the stuff that they use comes from CAT. I can just ask him when the next time people are being hired or laid off, and it corresponds to the health of CAT. And yes, people were laid off a few weeks ago because the orders just weren't there.
So does this mean that CAT has only outperformed Gold by 20% instead of 25% over the past 12 months? Why no post on BA's earning? Why? Also when are we going to see Gold versus the S&P this year.....
The cat in the coal mine ( canary's dead already)