About Caterpillar's "Tremendous Earnings Growth", There Is Just One Thing...

With CAT and MCD accounting for over 100 of the 250+ Dow points today, one would think that, as CNBC has repeatedly stated today, these two companies are posting "tremendous earnings growth."

And, in a way they are... a non-GAAP way. Because while CAT reported adjusted EPS of $1.28, up exactly 100% from a year ago  - almost as if it was goalseeked - something far less appetizing emerges when looking at CAT's actual, GAAP EPS, which happen to be exactly one quarter of the non-GAAP number, or $0.32, a 30% drop from a year ago.

And another quick look at these "one-time restructuring costs", which not only plague every single CAT earnings release, but were enough to eliminate more than 100% of the company's stated organic growth in the past year.

 

Finally, for those who - like CAT management - claim that the company's adjustments are non-recurring and one-time, here is the chart that will show that when it comes to "one-time charges" for CAT recurring earnings are more rare than actual addbacks, highlighting just one fact:

  • LTM Non-GAAP EPS: $4.05
  • LTM GAAP EPS: $(0.27)

In other words, CAT's entire per share "profit" in the last 12 months was due to adding back some $4.32 in very much recurring restructuring charges.