Welcome To The Wreckovery: Who Could Have Possibly Anticipated Caterpillar's Disastrous Earnings And Guidance?

Tyler Durden's picture

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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Truther's picture

All good & recovered. Nothing to see here. Move along now.

DavidC's picture

Quite. I can imagine that the market will end up today basis Apple's expected results and the FOMC this week. Pathetic.


Leopold B. Scotch's picture

It's official. We are recovered. Catapillar no longer needed as an indicator.

FreeMoney's picture

Its about time for the Statists to implement some more regulations to assist the economy....

FreeMoney's picture

Its about time for the Statists to implement some more regulations to assist the economy....

EscapeKey's picture

All priced in. As was the "worse than expected Greek election results" yesterday.

lester1's picture

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??

lester1's picture

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??

post turtle saver's picture

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...

post turtle saver's picture

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.

GetZeeGold's picture



Shovel ready jobs?

Bossman1967's picture

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.

pizzedoff's picture

What ever happened to the GREEN SHOOTS?

coulous's picture

CAT Need only one thing : much expensive gold and silver

Strong mining industry !!

Stop the MP manipulation

cowdiddly's picture


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.

SuperRay's picture

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.

Rootin' for Putin's picture

Hype and Incompetence, wasn't that his campaign slogan?

forwardho's picture

Don't knock the potatoe Diddly.

You will live to see food become the greatest aphrodisiac man has ever known.

StychoKiller's picture

Hard to feel amorous when you're too weak to crawl into bed!

Slave's picture

The recovery is longer so that means we're doing better.


dirtyfiles's picture

this time is diffrent...not

_ConanTheLibertarian_'s picture

New ticker symbol: CRAT(erpillar)

youngman's picture

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....

847328_3527's picture
HEDGE FUND MANAGER ODEY WARNS: We've Entered A Downturn That Will Be Remembered In 100 Years


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."



free_as_in_beer's picture

these markets have no memory.  100 years?  phooey

hotrod's picture

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.

Chad_the_short_seller's picture
Chad_the_short_seller (not verified) Jan 27, 2015 9:05 AM

CAT blames it on oil. Said 1/3 of its business revolves around oil.

GetZeeGold's picture



Proving once again that cheaper operating costs are a killer.

laomei's picture

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.

GetZeeGold's picture



Shipping crap across the ocean that weighs 100s of tons is really expensive....it's best to buy that stuff local.

Romney Wordsworth's picture
Romney Wordsworth (not verified) laomei Jan 27, 2015 9:16 AM

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.

Leraconteur's picture

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.

roddy6667's picture
  • I'm another laowei and I rarely see CAT equipment. The Japanese and Korean companies dominate here, probably made in Chinese factories like the cars.
post turtle saver's picture

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...

laomei's picture

nah, that's the indians.  chinese tend more to shit where they walk

wmbz's picture

I was under the impression that China was the save all for CAT sales. Have they run out of ghost cities to build?

blown income's picture

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...



hotrod's picture

Yep not about the equipment it's the economy/SHADOW. 

petolo's picture

Nothing a little planned obselecence couldn't cure.

forwardho's picture

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.

Cathartes Aura's picture

"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*

laomei's picture

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.

hic sunt leones's picture

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....

forwardho's picture

"Great Recovery"

More like... "The Royal Scam"


rogerrabbithole's picture

Yellen will just stop by SAMs, get a big tub of baby oil ease her big wiener in and save the day.

Rubbish's picture

Long hand shovels