Caterpillar Inc. Earnings Cheat Sheet: Beats the Street on Profit Rise

S&P 500 (NYSE:SPY) component Caterpillar Inc. (NYSE:CAT) reported net income above Wall Street’s expectations for the third quarter. Caterpillar offers construction and mining equipment as well as diesel and natural gas engines and industrial gas turbines.

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Caterpillar Earnings Cheat Sheet for the Third Quarter

Results: Net income for the farm and construction machinery company rose to $1.14 billion ($1.71 per share) vs. $792 million ($1.22 per share) in the same quarter a year earlier. This marks a rise of 44.1% from the year earlier quarter.

Revenue: Rose 41.2% to $15.72 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CAT reported adjusted net income of $1.93 per share. By that measure, the company beat the mean estimate of $1.59 per share. It beat the average revenue estimate of $15 billion.

Quoting Management: “I am pleased with how we’re performing and optimistic about demand for our products, and that is why we are moving forward with needed investment in our business to support our long-term growth opportunities,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman. “This was the best quarter for sales in our history, and our order backlog is at an all-time high.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 50%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 62.2% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 43.6% and in the first quarter, the figure rose more than fivefold.

Gross margin shrank 3.3 percentage points to 27.1%. The contraction appeared to be driven by increased costs, which rose 47.8% from the year earlier quarter while revenue rose 41.2%.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of $1.72 versus a mean estimate of net income of $1.77 per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.81 a share to $1.70 over the last ninety days. For the fiscal year, the average estimate has moved down from $7.11 a share to $6.78 over the last ninety days.

Competitors to Watch: Deere & Company (NYSE:DE), General Electric Company (NYSE:GE), Astec Industries, Inc. (NASDAQ:ASTE), Columbus McKinnon Corp. (NASDAQ:CMCO), Manitowoc Company, Inc. (NYSE:MTW), Cummins Inc. (NYSE:CMI), CNH Global N.V. (NYSE:CNH), Navistar Intl. Corp. (NYSE:NAV), Terex Corporation (NYSE:TEX), Joy Global (NASDAQ:JOYG) and Lindsay Corporation (NYSE:LNN).

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(Source: Xignite Financials)