Moments ago, Caterpillar was added to the great and growing list of bellwether companies that have reported disastrous Q4 earnings misses, when it announced that not only did it wildly miss its EPS estimate of $1.55, reporting only $1.35 in Q4 Adjusted EPS (and $1.23 on a GAAP basis), but worse, slashed its 2015 sales and profit outlook as follows:
We expect world economic growth to only improve modestly in 2015. The relatively slow growth in the world economy and continued weakness in commodity prices—particularly oil, copper, coal and iron ore—are expected to be negative for our sales. We expect sales and revenues in 2015 to be about $50 billion. To provide a better understanding of our expectations for 2015 profit, we are providing our outlook with and without anticipated restructuring costs. Over the past two years, we have undertaken restructuring activities designed to lower our long-term cost structure. Additional restructuring actions are anticipated in our outlook for 2015. In total, we expect the cost of these restructuring actions in 2015 to be about $150 million or about $0.15 per share. Our profit outlook for 2015 is about $4.60 per share, or $4.75 per share excluding restructuring costs.
And they didn't even blame the strong dollar. So what was the Street expecting: revenues of $55 billion and EPS of $6.00. Oops, and also the reason why the stock is crashing to the low $80s, down $30 from its recent highs, despite management repurchasing a whopping $4.2 billion in CAT stock in the past year.
This once again confirms what we said just moments ago, namely that when all is said and done, 2015 EPS will be lower then 2014, no only on a GAAP but non-GAAP basis.
Some other comments from CAT, which is trying to justify the collapse in its business which nobody could have possibly foreseen:
"The recent dramatic decline in the price of oil is the most significant reason for the year-over-year decline in our sales and revenues outlook. Current oil prices are a significant headwind for Energy & Transportation and negative for our construction business in the oil producing regions of the world. In addition, with lower prices for copper, coal and iron ore, we've reduced our expectations for sales of mining equipment. We've also lowered our expectations for construction equipment sales in China. While our market position in China has improved, 2015 expectations for the construction industry in China are lower," Oberhelman said.
"Unambiguously good" low oil prices right?
Oh wait, did we say "nobody could have possibly foreseen" this CAT shocker? We take that back, because anyone who had looked at CAT's monthly retail sales reports, for example shown here precisely a month ago in "Where The "Great Recovery" Is 25% Worse Than The "Great Recession"" would have known exactly what was coming.
And since we show them every month, why not do it again: here are the latest CAT retail sales trends around the globe. Enjoy that "recovery" folks