Caterpillar Soars To All Time High After Beating Expectations, Boosting Guidance

When discussing  yesterday's release of Caterpillar retail sales, which soared the most in 6 years, we said if "CAT's  dealer sales statistics, traditionally released just one day before the company's earnings report, are an indication of what to expect from the heavy industrial equipment maker, then CAT's Q4 results will be a blow out."

Well, that's precisely what happened, because this morning the heavy industrial manufacturer reported Q4 EPS of $2.16, smashing expectations of $1.79 on revenue of $12.90BN, nearly a billion above the $11.90BN expected.

More importantly, the Deerfield, Illinois company projected growth in its construction and mining-equipment businesses, forecasting increased sales to China and expansion in North America, even without a U.S. infrastructure bill, according to a statement Thursday. As a result, the midpoint of its 2018 forecast for earnings of $8.25 to $9.25 a share was above the $8.63 consensus estimate.

As Bloomberg  notes, estimates for Caterpillar earnings had risen 16 percent the past three months, the most in the Dow Jones Industrial Average, amid signs of improving demand across the globe.

Caterpillar, which in December capped the biggest annual gain in its shares since 2003, raised its 2017 revenue projections three times last year as surging Chinese demand and an improving U.S. economy lifted sales of mining and construction equipment.

“We have for the first time a relatively coordinated growth in global economies and capital equipment as well,” Larry De Maria, an analyst at William Blair & Co., said in an interview before the earnings were released. “With that backdrop and accelerated growth continuing, the outlook is pretty bullish.”

It is indeed, and as a result this morning CAT shares were over 4% higher...

... after climing 26% in Q4, and 70% in 2017. The shares were the second-best performer in the Dow Jones Industrial Average last quarter. Meanwhile, the long-term CAT chart looks nothing short of parabolic.