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Welcome To The Wreckovery: Who Could Have Possibly Anticipated Caterpillar's Disastrous Earnings And Guidance?
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
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All good & recovered. Nothing to see here. Move along now.
Quite. I can imagine that the market will end up today basis Apple's expected results and the FOMC this week. Pathetic.
DavidC
It's official. We are recovered. Catapillar no longer needed as an indicator.
Its about time for the Statists to implement some more regulations to assist the economy....
Its about time for the Statists to implement some more regulations to assist the economy....
All priced in. As was the "worse than expected Greek election results" yesterday.
Its hard to believe any earnings nowadays with all the speculators focusing on hype and non-GAAP earnings. CAT missing earnings is huge.
Are we being lied to about a "recovery" going on??
Its hard to believe any earnings nowadays with all the speculators focusing on hype and non-GAAP earnings. CAT missing earnings is huge.
Are we being lied to about a "recovery" going on??
yawn... cyclical industry is cyclical... anyone who owns CAT (as I do) knows this when they buy it...
still enjoying a 2+ bagger and watching my dividends pay out... they just roll back in and compound, works for me...
if this site really wanted to ask the deep dark questions, they could analyze why a company like CAT constantly gets hammered while a company like Cummins (NYSE:CMI) gets a pass while working against the same market headwinds... food for thought...
three downvotes just out of spite... that's ok, you're morons, I'll answer the question for you...
it's because CMI isn't a Dow component... Q.E.D.
Shovel ready jobs?
Shoveling the crap that comes out of thier mouths. I see the markets up on FaoMC meeting seems every week they come out and bail out the meetings.
What ever happened to the GREEN SHOOTS?
CAT Need only one thing : much expensive gold and silver
Strong mining industry !!
Stop the MP manipulation
This^
There is no free lunch. But hey, would not want to do anything to create high paying pipeline, oilfield, mining or heavy equip mfg jobs. Gasp at the thought. No, we gotta go to Idaho and talk up growing freaking potatoes.
Open the borders too, Its become obvious they want us on our knees groveling.
The crisis has passed. Didn't CAT get the memo? Btw, watching the 'news' about the blizzard that wasn't in NYC area. What a joke! Between the hype and the incompetence, don't know which is more pathetically hilarious.
Hype and Incompetence, wasn't that his campaign slogan?
Don't knock the potatoe Diddly.
You will live to see food become the greatest aphrodisiac man has ever known.
Hard to feel amorous when you're too weak to crawl into bed!
The recovery is longer so that means we're doing better.
/sarc
this time is diffrent...not
New ticker symbol: CRAT(erpillar)
cat[DERP]illar
SCATerpillar
And the strong dollar is going to kill them too..not just the economic reasons....now other manufacturers are much cheaper.....and the trade war is on....
British hedge fund manager Crispin Odey thinks we've entered an economic downturn that is "likely to be remembered in a hundred years," and central banks won't be able to stop it.
Odey also writes that he thinks "equity markets will get devastated."
http://uk.businessinsider.com/crispin-odey-says-equities-will-get-devast...
these markets have no memory. 100 years? phooey
FOMC still on track to raise rates 1st QTR or Summer, which means late 2015 or into 2016 on the back of the strong economic news and inflation caused by raging CRB index. Weak dollar was also noted for rate increase as well as bellweather company earnings such as UTX, IBM and CAT.
CAT blames it on oil. Said 1/3 of its business revolves around oil.
Proving once again that cheaper operating costs are a killer.
funny thing about that... china sure did buy up a bunch of stuff, but i RARELY see any CAT equipment, it's almost all domestic stuff. it fills a short term need, it's then replicated and the domestic market can meet the domestic needs, at which point, you have nothing of any value to offer unless you're willing to undercut.
Shipping crap across the ocean that weighs 100s of tons is really expensive....it's best to buy that stuff local.
bought enough protypes to reverse engineer. Kinda like sticking Louis Vuitton & D&G labels on Wal Mart bags in da hood & sellin' em to the hoes.
Cranes, too. There are thousands of them all over China.
Construction methods from existing supertall projects are being copied and then replicated on 30-50 storey buildings in every city you have never heard of.
given all the articles and evidence seen recently that the Chinese, for all intents and purposes, literally shit where they eat... I wouldn't hold them up as a model for ANYTHING worth having...
nah, that's the indians. chinese tend more to shit where they walk
OOHHHH SNAP!
I was under the impression that China was the save all for CAT sales. Have they run out of ghost cities to build?
Said many times before ...all the Cat dealers here in the Lafayette , southwest LA area have new shit everywhere ...the used equipment dealers as well have shit everywhere they can stick a machine...
There not selling , the rental equipment lots full...so who's buying??? nobody...why would I buy NEW when I can just rent or lease for a project and not have a $300k piece of equipment I don't need any more...
Not to mention all the other manufactures lots are full as well...
They all build a good product .....this equipment doesn't have a 1 year life span....shit is built to last...so with regular maintenance the equipment should last for many years...
Yep not about the equipment it's the economy/SHADOW.
Nothing a little planned obselecence couldn't cure.
In SW Florida There are storage lots with thousands of 300k-500k deluxe motor homes.
Even now there are more stoage lots being paved.
No matter how well a product is made, it begins to deteriorate, and depreciate the moment it leaves the factory.
The Company posted record profits last year.
May the Farce be with you.
"lots" of deluxe motor homes, record profits posted.
ghost cities, armkn style.
wot, you no want big box on wheels with dual-TV's, and gas so cheap???
*head shake*
well you see, that's the key, they have this silly dream most likely of selling the unit and then having a maintenance contract in place that is so utterly hilarious you would have to be a moron to buy the thing in the first place. it only would make any sense if you just snap up some of the more unique pieces for very specific purposes with any other aquisition being a lease long enough to copy the damn thing entirely. As long as you are not trying to sell the things overseas, there's precisely jack shit that can be done about it.
A tractor producer in my area has over 4000 brand-new tractors standing around in the factory and on rented lots.
That is ap. a whole year of production of that factory.
When the farmers are not buying new tractors anymore, machines they buy mostly for themselves and spent weeks and months on every year....
"Great Recovery"
More like... "The Royal Scam"
Rebels capture Ukraine commander in Donetsk airport fight, force prisoners to face angry crowds
Yellen will just stop by SAMs, get a big tub of baby oil ease her big wiener in and save the day.
Long hand shovels
I am not saying I like it, but what we do is not even Keynesianism. Keynes was pro-make work at any cost to get money into the public hands. He would have had governments buying gold reserves at high prices (really just normal prices compared to this) instead of selling out their reserves at 5% of their true value to suppress it. This would be done just to keep mining alive and people employed. Keynes had no problem with gold. He had a problem with tying gold to the monetary system. He was so pro-make work that he suggested burying bags of money for people to dig up. You think someone who says that is against gold mining? So instead of what Keynes intended, we have nothing but theft at the top, and super stupidity stopping money from getting into the public. All just to support a banking ponzi scheme and a massive gold debt problem that cannot be marked to true market value. In a real Keynesian world, CAT would be selling tractors left and right. And you know what? Someday they will be. Because this mafia stlye communism doesn't work and it is imploding.
excellent point +1
Cat closed two plants near me last week, one in WNC and one in Ga. I both towns it is THE job creator.
We expect sales and revenues in 2015 to be about $50 billion.
Not sure about you but I could live well off of $50 BILLION a year. WHy do they think they have to earn more than that? Isnt there a point at which there is a limit to the organic growth and things have to stabalize?
here's the thing... a company like CAT has a stock price that's going down after reporting _profit_
let that sink in for a moment... they're a _profitable operation_ in spite of all the hoo ha, yet since The Street was full of fucking idiots who expected them to be WILDLY PROFITABLE BEYOND ALL REASON, it's CAT that pays the price...
will say it again, CAT is cyclical and you have to have a pair between your legs to hold it long term... daily, hell even yearly action for CAT isn't worth looking at... you have to look at it in 2 to 5 year cycles...
8 years ago your comments would have held water. We know better now, and it is far less about "having a pair" than it is about "drinking the kool-aid.
Plunge protection and free money have damaged the markets beyond any "2-5 year cycle" capability. Such distortions as we have seen, cannot be relied on to work themselves out in that time frame. The potential glut of inventory under these conditions - and the conditions yet to arrive - could easily take a decade to resolve.
The last 6 years have been anything BUT organic.
How "stable" was Frankenstien's monster?
As any competent Biologist can tell you, once the colony(s) reach the edge of the Petri dish, there's nowhere to go!
So cheap oil is good for the industry and strong dollar is bad, right? Who would have thought..
... the CAT's out of the bag ...
Caterpillar has much the same problem as McDonalds: Nobody has any dough. The only people making money are those involved in the financial manipulation industries and they don't buy a lot of big macs or earthmovers.
Idiots. They need to diversify into financial manipulation and engage in more fraud. Start by firing their accountants and hire ex-Arthur Anderson guys. There's no reason, with good accountants, they should not have reported at least $7 a share. Too late now-a missed opportunity. Now the innocent shareholders will pay the price. Well, there's always next quarter,
You know what to do, all at once now: BTFD.
CAT needs a new CFO.
We're sure stickin it to them Rooskies though................
I own a heavy construction company in Florida. Between 2005 and 2007 I bought at least 100 pieces of CAT equipment. Today, I only own pickup trucks (even some of these I lease). I will NOT buy any equipment!!! I will only rent because I have no idea if I will have work 90 days from now. I have never seen a market like this. Lots of subdivisions and shopping centers (and private jails/prisons) being built, but none of this gives me a warm and fuzzy. Shit be real scary out there.
BTW, CAT is some overpriced garbage! Komatsu and Deere just as good but 30% less. Fuck CAT!
CAT has been downgraded to pussy, new ticker symbol CUNT.
I wonder how many more plants they plan on moving to Mexico?
Why is analysis so hard? Caterpillar makes machines that are used by others who BUILD and MAKE stuff. Stuff isn't being built or made, so of COURSE Caterpillar's earnings will suffer...
Disclosure: I'm not an economist. I'm a retired nurse from PA. I don't expect Jamie Dimon to know how to place a foley catheter, but I DO expect him to recognize piss when he sees it.
Now maybe I, as an untrained 'economy whiz', would lack the know-how to "place a foley" into this economy, but I know damned well what piss looks and smells like. How come these guys can't?
Your line of questioning is predicated on the idea that the "piss" is to them, what it is to you.