Caterpillar Earnings on Deck

S&P 500 (NYSE:SPY) component Caterpillar (NYSE:CAT) will unveil its latest earnings on Monday, October 22, 2012. Caterpillar offers construction and mining equipment as well as diesel and natural gas engines and industrial gas turbines.

Caterpillar Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $2.21 per share, a rise of 14.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $2.41. Between one and three months ago, the average estimate moved down. It also has dropped from $2.27 during the last month. For the year, analysts are projecting net income of $9.43 per share, a rise of 20.7% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 27 cents, reporting profit of $2.54 per share against a mean estimate of net income of $2.27 per share.

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A Look Back: In the second quarter, profit rose 67.4% to $1.7 billion ($2.54 a share) from $1.01 billion ($1.52 a share) the year earlier, exceeding analyst expectations. Revenue rose 22.1% to $17.37 billion from $14.23 billion.

Stock Price Performance: Between September 18, 2012 and October 16, 2012, the stock price dropped $8.11 (-8.7%), from $93.07 to $84.96. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 10, 2012, when shares rose for nine straight days, increasing 11.8% (+$10.59) over that span. It saw one of its worst periods between September 19, 2012 and October 1, 2012 when shares fell for nine straight days, dropping 9% (-$8.47) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 6.8% in revenue from the year-earlier quarter to $16.79 billion.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 30.3% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 59.8% in the fourth quarter of the last fiscal year and 29.5% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.42 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.39 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 10.2% to $44.29 billion while liabilities rose by 8.4% to $31.27 billion.

Analyst Ratings: There are mostly holds on the stock with 11 of 21 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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