Caterpillar Inc. (NYSE: CAT), Albemarle Co. (NYSE: ALB), Fortinet, Inc. (NASDAQ: FTNT), Volterra Semi (NASDAQ: VLTR), Landstar System, Inc. (NASDAQ: LSTR) and Texas Instruments (NYSE: TXN) ratings had price targets adjusted or ratings reiterated by analysts.
Oppenheimer reiterated its "Underperform" rating on Albemarle Co. (ALB) was given a reiterated “Underperform” by analysts at .
Wunderlich reiterated its "Hold" rating on Fortinet, Inc. (FTNT).
Volterra Semi (VLTR) had its price target lowered by analysts from from $33.00 to $29.00. They have a “Buy” rating on the company.
Landstar System, Inc. (LSTR) had its price target raised by Deutsche Bank (NYSE:DB) to $50.00.
Caterpillar Inc. (CAT) had its price target raised by UBS AG (NYSE:UBS) to $93.00. They have a “Neutral” rating on the company.
Texas Instruments (TXN) had its price target raised by Jefferies (NYSE:JEF) to $40.00.
Showing posts with label Caterpillar. Show all posts
Showing posts with label Caterpillar. Show all posts
Wednesday, October 26, 2011
Friday, November 5, 2010
Caterpillar (NYSE:CAT), Bucyrus (Nasdaq:BUCY) Explode Upward on Commodity Connection
Caterpillar (NYSE:CAT) and Bucyrus International, Inc. (Nasdaq:BUCY) both performed strongly Thursday as the fallout from the implementation of the quantitative easing strategy of the Federal Reserve is digested by the market.
With commodities set to soar even more because of the inflation and weak U.S. dollar induced by the Fed's actions, both equipment companies should be among the stronger beneficiaries of the effort as higher prices should mean more expansion and increased purchases of equipment.
Caterpillar closed the trading day at $83.18, gaining $3.30, or 4.13 percent. Bucyrus performed even better, rising to $72.48, posting a gain of $4.82 on the day, or 7.12 percent.
With commodities set to soar even more because of the inflation and weak U.S. dollar induced by the Fed's actions, both equipment companies should be among the stronger beneficiaries of the effort as higher prices should mean more expansion and increased purchases of equipment.
Caterpillar closed the trading day at $83.18, gaining $3.30, or 4.13 percent. Bucyrus performed even better, rising to $72.48, posting a gain of $4.82 on the day, or 7.12 percent.
Monday, October 25, 2010
Demand for Caterpillar (NYSE:CAT) Products Look Good
Handily beating earnings estimates last quarter, Caterpillar (NYSE:CAT) has garnered some solid support for growth in the near term.
While maintaining a "Neutral" on the equipment maker, UBS (NYSE:UBS) raised their price target from $74 to $85, and their earnings estimate too.
"Given an improved demand outlook and demonstrated impact of cost takeouts, we are raising our 2011E EPS to $4.00, from $3.60, and raising our 2011E and 2012E to $5.70 and $7.50, from $4.50 and $6.00, respectively," said UBS.
Caterpillar said in a statement, "2010 is shaping up to be one of the most significant year-over-year increases in sales and revenues in our history."
More significantly, Caterpillar's guidance for sales in 2011, was strong, with revenue estimated to reach $50 billion for the full year. That's about a 20.5 percent boost from guidance last year.
Credit Suisse (NYSE:CS) said if margins increase by 20 percent or more incrementally, earnings per share for Caterpillar could reach $6 a share for the year.
Caterpillar closed Friday at $78.33, losing $0.56, or 0.71 percent.
While maintaining a "Neutral" on the equipment maker, UBS (NYSE:UBS) raised their price target from $74 to $85, and their earnings estimate too.
"Given an improved demand outlook and demonstrated impact of cost takeouts, we are raising our 2011E EPS to $4.00, from $3.60, and raising our 2011E and 2012E to $5.70 and $7.50, from $4.50 and $6.00, respectively," said UBS.
Caterpillar said in a statement, "2010 is shaping up to be one of the most significant year-over-year increases in sales and revenues in our history."
More significantly, Caterpillar's guidance for sales in 2011, was strong, with revenue estimated to reach $50 billion for the full year. That's about a 20.5 percent boost from guidance last year.
Credit Suisse (NYSE:CS) said if margins increase by 20 percent or more incrementally, earnings per share for Caterpillar could reach $6 a share for the year.
Caterpillar closed Friday at $78.33, losing $0.56, or 0.71 percent.
Thursday, October 21, 2010
Caterpillar (NYSE:CAT) Beyond the Third Quarter
With almost perfect market conditions over the last 12 months, Caterpillar's (NYSE:CAT) revenue has soared by over 40 percent over last year.
The $10.5 billion in estimated revenue this quarter reflects market conditions which are close to optimal after a weak third quarter in 2009. Part of the 40 percent surge is attributable to that factor.
Sales of machinery this quarter is expected to by almost double last year according to Goldman Sachs (NYSE:GS), which account for about 66 percent of company revenue. Engine sales are also expected to jump by 24 percent over last year. Engine sales account for about 33 percent of Caterpillar's business.
A robust mining industry and emerging market growth are behind the projected strong growth of Caterpillar, but the question is - where do they go from here?
One of the things the company must do after the strong quarterly report coming up is to start managing expectations.
Costs related to compliance with emission standards are expected to cut into margins in earnings. Questions on the ability to continue pricing increases are married to that idea as well.
With investors and analysts expecting Caterpillar to continue on as they are, they may need to rein in those expectations and provide a more level outlook.
Having said that, some of this is out of their control, as what the Federal Reserve does in relationship to quantitative easing will play a big part in how they will be able to price.
If there is some easing that takes place, which is expected, commodity prices could easily soar much higher and Caterpillar should be able to duplicate, and possibly surpass this years' performance.
If some surprise emerges in this regard, they could take a hit.
I think QE is going to be implemented, and when it does, Caterpillar is pretty well positioned to profit from it.
The $10.5 billion in estimated revenue this quarter reflects market conditions which are close to optimal after a weak third quarter in 2009. Part of the 40 percent surge is attributable to that factor.
Sales of machinery this quarter is expected to by almost double last year according to Goldman Sachs (NYSE:GS), which account for about 66 percent of company revenue. Engine sales are also expected to jump by 24 percent over last year. Engine sales account for about 33 percent of Caterpillar's business.
A robust mining industry and emerging market growth are behind the projected strong growth of Caterpillar, but the question is - where do they go from here?
One of the things the company must do after the strong quarterly report coming up is to start managing expectations.
Costs related to compliance with emission standards are expected to cut into margins in earnings. Questions on the ability to continue pricing increases are married to that idea as well.
With investors and analysts expecting Caterpillar to continue on as they are, they may need to rein in those expectations and provide a more level outlook.
Having said that, some of this is out of their control, as what the Federal Reserve does in relationship to quantitative easing will play a big part in how they will be able to price.
If there is some easing that takes place, which is expected, commodity prices could easily soar much higher and Caterpillar should be able to duplicate, and possibly surpass this years' performance.
If some surprise emerges in this regard, they could take a hit.
I think QE is going to be implemented, and when it does, Caterpillar is pretty well positioned to profit from it.
Wednesday, October 13, 2010
Alcoa (NYSE:AA) Continues Climb on China Commodity Imports
Dow movers Alcoa (NYSE:AA) and Caterpillar (NYSE:CAT) moved higher today on news commodity imports to China were higher than expects, with China's trade surplus dropping to a five-month low of $16.88 billion in September.
The Dow Jones Industrial Average and Standard & Poor's 500-stock index are both up today.
Alcoa rose to $13.38, gaining $0.18, or 1.36 percent at 1:14 PM EDT. Caterpillar increased to $80.95, gaining $1.61, or 2.03 percent.
The Dow Jones Industrial Average and Standard & Poor's 500-stock index are both up today.
Alcoa rose to $13.38, gaining $0.18, or 1.36 percent at 1:14 PM EDT. Caterpillar increased to $80.95, gaining $1.61, or 2.03 percent.
Friday, October 8, 2010
Caterpillar (NYSE:CAT) to Battle Joy (Nasdaq:JOYG) and Bucyrus (Nasdaq:BUCY) in Mining Shovels Segment
After being out of the mining shovel business for several years, Caterpillar Inc (NYSE:CAT) announced it's going to enter the segment again, competing directly with market leaders Joy Global Inc (Nasdaq:JOYG) and Bucyrus International (NYSE:BUCY).
There is no doubt this category will be strong for years, as inflationary monetary policies will drive up the cost of raw materials, and emerging markets hungry for them will be pay the price to land them.
That means mining equipment like mining shovels will be hot for some time to come, as the bull commodity market continues on its long journey.
Printing money around the world has resulted in a number of currencies being debased, especially against gold, which also works strong with other commodities as well.
That means raw materials in general will continue to go up in price, generating spending from miner companies on the equipment to make them more efficient.
Confirming this is data from Bernstein Research, which says capital expenditure by mining companies will increase to record highs in 2011, growing to an estimated $113 billion. That would break the prior record of $110 billion.
The positive factor for Caterpillar and others in the industry, is this should continue to be a healthy and vibrant industry even if Western countries continue to falter, as the major growth is in emerging markets, which are going to, for the most part, continue to grow, even if the pace slows down some.
Demand for raw materials isn't near to playing out, and there will be years of robust growth and demand before it starts to level off.
Mining equipment will be among those ancillary industry profiting from that growth.
Goldman Sachs (NYSE:GS) said they see the overall expansion plans of Caterpillar to boost the sales for the company by 15 percent in 2011 and 10 percent in 2012.
There is no doubt this category will be strong for years, as inflationary monetary policies will drive up the cost of raw materials, and emerging markets hungry for them will be pay the price to land them.
That means mining equipment like mining shovels will be hot for some time to come, as the bull commodity market continues on its long journey.
Printing money around the world has resulted in a number of currencies being debased, especially against gold, which also works strong with other commodities as well.
That means raw materials in general will continue to go up in price, generating spending from miner companies on the equipment to make them more efficient.
Confirming this is data from Bernstein Research, which says capital expenditure by mining companies will increase to record highs in 2011, growing to an estimated $113 billion. That would break the prior record of $110 billion.
The positive factor for Caterpillar and others in the industry, is this should continue to be a healthy and vibrant industry even if Western countries continue to falter, as the major growth is in emerging markets, which are going to, for the most part, continue to grow, even if the pace slows down some.
Demand for raw materials isn't near to playing out, and there will be years of robust growth and demand before it starts to level off.
Mining equipment will be among those ancillary industry profiting from that growth.
Goldman Sachs (NYSE:GS) said they see the overall expansion plans of Caterpillar to boost the sales for the company by 15 percent in 2011 and 10 percent in 2012.
Tuesday, October 5, 2010
Caterpillar (NYSE:CAT), Deere (NYSE:DE), Cummins (NYSE:CMI), AGCO (Nasdaq:AGCO) and Eaton (NYSE:ETN) among Favorites of Barclays (NYSE:BCS) for Brazil Exposure
In their recent research trip to Brazil concerning building out their infrastructure, Barclays (NYSE:BCS) came away with several favorites in the machinery sector serving the build-out, including Caterpillar (NYSE:CAT), Cummins (NYSE:CMI), Deere (NYSE:DE), AGCO (Nasdaq:AGCO) and Eaton (NYSE:ETN)
The two favorites of Barclays in the entire group are Caterpillar and CMI.
Overall, Barclays said after talking to these and many other players in Brazilian infrastructure projects, the feeling is things are picking up and those companies with large exposure should reap strong rewards going forward, as expenditures are increasing.
Brazil has been overshadowed by China and to a lesser extent India recently, and it may be their time to shine as significant capital is generated from a variety of energy sectors and projects.
Other companies they met with in the equipment industry were Terex (NYSE:TEX) and Bucyrus International (Nasdaq:BUCY).
The two favorites of Barclays in the entire group are Caterpillar and CMI.
Overall, Barclays said after talking to these and many other players in Brazilian infrastructure projects, the feeling is things are picking up and those companies with large exposure should reap strong rewards going forward, as expenditures are increasing.
Brazil has been overshadowed by China and to a lesser extent India recently, and it may be their time to shine as significant capital is generated from a variety of energy sectors and projects.
Other companies they met with in the equipment industry were Terex (NYSE:TEX) and Bucyrus International (Nasdaq:BUCY).
Monday, October 4, 2010
JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) Downgrade Deere (NYSE:DE)
Deere & Company (NYSE:DE) suffered two downgrades, as JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) believe they're at the top of their valuation, increasing almost 30 percent since the early part of July.
Wells Fargo's Andrew Cases slashed Deere from "Outperform" to "Market Perform," while JP Morgan's Ann Duignan lowered the agricultural manufacturer from "Overweight" to "Neutral."
A drought in Russia and the resultant increase in corn prices and other crops has helped the industry surge to higher levels, including Caterpillar (NYSE:CAT), which has also pushed up close to yearly highs.
Caterpillar is moving up for different reasons, as the mining sector also has prices surging and mining and construction equipment sales have been in higher demand because of it.
In the near term it looks like they'll have a hard time moving much higher, and will probably remain level for a while.
Wells Fargo's Andrew Cases slashed Deere from "Outperform" to "Market Perform," while JP Morgan's Ann Duignan lowered the agricultural manufacturer from "Overweight" to "Neutral."
A drought in Russia and the resultant increase in corn prices and other crops has helped the industry surge to higher levels, including Caterpillar (NYSE:CAT), which has also pushed up close to yearly highs.
Caterpillar is moving up for different reasons, as the mining sector also has prices surging and mining and construction equipment sales have been in higher demand because of it.
In the near term it looks like they'll have a hard time moving much higher, and will probably remain level for a while.
Bank of America (NYSE:BAC) Downgrades Caterpillar (NYSE:CAT) to "Neutral"
Bank of America (NYSE:BAC) downgraded Caterpillar (NYSE:CAT) from "Buy" to "Neutral," as the equipment maker's share price soared by 21 percent over the last month.
With September being such a big month for many equities, and the recession continuing on, especially in mature markets, there isn't much more room for a number of companies to move upward, including Caterpillar.
Even the recent announcement by Caterpillar that they were going to raise prices soon didn't have much effect, as the reality is they probably won't be able to successfully implement that in North America and Europe, although they do have some pricing opportunities in emerging markets, especially Brazil.
But to attempt to implement a raise in prices in all markets doesn't seem realistic, and it could cut down on sales in some major markets.
Caterpillar closed the week at $79.22, falling $0.46 on Friday, or 0.58 percent.
With September being such a big month for many equities, and the recession continuing on, especially in mature markets, there isn't much more room for a number of companies to move upward, including Caterpillar.
Even the recent announcement by Caterpillar that they were going to raise prices soon didn't have much effect, as the reality is they probably won't be able to successfully implement that in North America and Europe, although they do have some pricing opportunities in emerging markets, especially Brazil.
But to attempt to implement a raise in prices in all markets doesn't seem realistic, and it could cut down on sales in some major markets.
Caterpillar closed the week at $79.22, falling $0.46 on Friday, or 0.58 percent.
Friday, September 24, 2010
Alcoa (NYSE:AA), Caterpillar (NYSE:CAT) Lead DJIA Higher
Alcoa (NYSE:AA) and Caterpillar (NYSE:CAT) are leading the Dow Jones Industrial Average to the fourth straight week in positive territory. For the month the Dow has gained 8.2 percent so far.
At 12:47 PM EDT, Alcoa was at $12.18, gaining $0.44, or 3.71 percent. Caterpillar stood at $79.89, an increase of $3.63, or 4.76 percent at the same time.
Perceived economic stability and upward revisions in durable-goods orders and sales of new homes for July seem to be the catalyst for the upward move, as August figures show durable-goods orders and sales of new homes were weaker than expected.
Orders for manufactured goods increased in August as well, and news that business confidence in Germany also added to the positive sentiment.
As has been happening throughout September, a large number of equity investors have seemed to pick and choose the economic news they wanted to include in making decisions, and ignore the many bits of news that created a mixed bag at best.
The Dow was at 10849.77, up 187.35, or 1.76 percent at 12:52 PM EDT.
At 12:47 PM EDT, Alcoa was at $12.18, gaining $0.44, or 3.71 percent. Caterpillar stood at $79.89, an increase of $3.63, or 4.76 percent at the same time.
Perceived economic stability and upward revisions in durable-goods orders and sales of new homes for July seem to be the catalyst for the upward move, as August figures show durable-goods orders and sales of new homes were weaker than expected.
Orders for manufactured goods increased in August as well, and news that business confidence in Germany also added to the positive sentiment.
As has been happening throughout September, a large number of equity investors have seemed to pick and choose the economic news they wanted to include in making decisions, and ignore the many bits of news that created a mixed bag at best.
The Dow was at 10849.77, up 187.35, or 1.76 percent at 12:52 PM EDT.
Thursday, September 23, 2010
Goldman (NYSE:GS) Likes Caterpillar (NYSE:CAT) Short Term
Goldman Sachs (NYSE:GS) said they really like the short-term prospects of Caterpillar (NYSE:CAT), and increased their earnings per share and price target estimates for the large equipment company.
Even so, the risk/reward balance over the long term is balance said Goldman, and they maintained their "Neutral" rating on Caterpillar.
Earnings per share estimates for the next three were increased by an average of 10 percent. 2010 was raised to $4.25; 2011 to $5.45; and 2012 to $6.80 a share.
That is dependent on an economic recovery said Goldman, although the strength of commodities and the resultant demand for equipment for miners, and possibly farmers in reference to agriculture, could keep the company growing even if the majority of the rest of the economy sputters.
Many companies had been holding off on purchasing new equipment, and now they must do it, and so that restocking should also benefit Caterpillar in the near term.
The price target on Caterpillar was raised by Goldman from $70 to $77.
Caterpillar closed Wednesday at $76.18, down $0.21, or 0.27 percent.
Even so, the risk/reward balance over the long term is balance said Goldman, and they maintained their "Neutral" rating on Caterpillar.
Earnings per share estimates for the next three were increased by an average of 10 percent. 2010 was raised to $4.25; 2011 to $5.45; and 2012 to $6.80 a share.
That is dependent on an economic recovery said Goldman, although the strength of commodities and the resultant demand for equipment for miners, and possibly farmers in reference to agriculture, could keep the company growing even if the majority of the rest of the economy sputters.
Many companies had been holding off on purchasing new equipment, and now they must do it, and so that restocking should also benefit Caterpillar in the near term.
The price target on Caterpillar was raised by Goldman from $70 to $77.
Caterpillar closed Wednesday at $76.18, down $0.21, or 0.27 percent.
Thursday, September 2, 2010
BHP (NYSE:BHP), Freeport (NYSE:FCX) May be Abandoning Cyclical Practices
The mining sector in general, including gold miners, seems to be moving away from cyclical business practices into more of a level approach, and majors like BHP Billiton (NYSE:BHP) and Freeport-McMoRan (NYSE:FCX) could draw a lot more investors if they continue on in that direction.
Mining and construction equipment makers like Joy Global (Nasdaq:JOYG), Bucyrus (Nasdaq:BUCY) and Caterpillar (NYSE:CAT) may also be moving more in that direction in response to the miners.
With commodities among the expected top market performers over the next decade, a number of mining companies have been also moving more toward operating as businesses that are easier to understand, and offering perks like increased dividends to their shareholders.
For miners and equipment providers, this deals with questions like managing orders in a way that could say no to some in order to extend the period of time the orders are received. That would lower the cyclical effects which have been part of the industry for so long, and provide shareholders with a more level and gradually growing share price, rather than the usual swings.
Commodity prices are of course a major factor in all this, and affect all businesses connected to the market. Extending orders over a period of time would also help in that regard, as it could offer an average price over a longer period of time that would also be level.
If all businesses involved with mining and mining equipment move in this direction, it would result in a much more stable and predictable environment, which would be attractive to investors and more easy to manage for the companies.
Mining and construction equipment makers like Joy Global (Nasdaq:JOYG), Bucyrus (Nasdaq:BUCY) and Caterpillar (NYSE:CAT) may also be moving more in that direction in response to the miners.
With commodities among the expected top market performers over the next decade, a number of mining companies have been also moving more toward operating as businesses that are easier to understand, and offering perks like increased dividends to their shareholders.
For miners and equipment providers, this deals with questions like managing orders in a way that could say no to some in order to extend the period of time the orders are received. That would lower the cyclical effects which have been part of the industry for so long, and provide shareholders with a more level and gradually growing share price, rather than the usual swings.
Commodity prices are of course a major factor in all this, and affect all businesses connected to the market. Extending orders over a period of time would also help in that regard, as it could offer an average price over a longer period of time that would also be level.
If all businesses involved with mining and mining equipment move in this direction, it would result in a much more stable and predictable environment, which would be attractive to investors and more easy to manage for the companies.
BHP (NYSE:BHP), Freeport (NYSE:FCX) and Alcoa (NYSE:AA) Advance on Weakening Dollar
While the U.S. manufacturing report posted better numbers than believed, the drop in the value of the U.S. dollar was the impetus behind mining companies surging Wednesday.
Oddly, the cut in jobs in the private sector for August was largely shrugged off by those desperate to grasp onto any positive economic news, which has been very little lately.
For BHP Billiton (NYSE:BHP), Freeport McMoRan (NYSE:FCX) and Alcoa (NYSE:AA), they enjoyed the weakening of the dollar which is always a boost to commodity prices.
The index from the Institute for Supply Management showed a reading of 56.3 in August, whereas analysts had been looking for it to drop to 52.9.
While the mining sector performed the best, manufacturers like Deere (NYSE:DE), General Electric (NYSE:GE) and Caterpillar (NYSE:CAT) were beneficiaries of the index number increase as well.
The Dow rose by over 250 point Wednesday in response to the news.
Oddly, the cut in jobs in the private sector for August was largely shrugged off by those desperate to grasp onto any positive economic news, which has been very little lately.
For BHP Billiton (NYSE:BHP), Freeport McMoRan (NYSE:FCX) and Alcoa (NYSE:AA), they enjoyed the weakening of the dollar which is always a boost to commodity prices.
The index from the Institute for Supply Management showed a reading of 56.3 in August, whereas analysts had been looking for it to drop to 52.9.
While the mining sector performed the best, manufacturers like Deere (NYSE:DE), General Electric (NYSE:GE) and Caterpillar (NYSE:CAT) were beneficiaries of the index number increase as well.
The Dow rose by over 250 point Wednesday in response to the news.
Wednesday, September 1, 2010
Caterpillar (NYSE:CAT) Adding to Brazil Manufacturing Operations
Caterpillar (NYSE:CAT) said it will spend close to $180 million in order to expand its Brazilian manufacturing capacity to meet the increasing demand in the largest South American market, as well as the rest of Latin America.
Spending will target its Piracicaba plant in Brazil - which is already operational - for expansion, while acquiring another plant in Campo Largo.
Campo Largo wil produce small-wheel loaders and backhoes used by construction companies. Production there will start in 2011.
The Piracicaba expenditure and expansion will proceed over a two year period.
Shares in Caterpillar soared today by over 5 percent, being pulled up with the broader market.
Spending will target its Piracicaba plant in Brazil - which is already operational - for expansion, while acquiring another plant in Campo Largo.
Campo Largo wil produce small-wheel loaders and backhoes used by construction companies. Production there will start in 2011.
The Piracicaba expenditure and expansion will proceed over a two year period.
Shares in Caterpillar soared today by over 5 percent, being pulled up with the broader market.
Friday, August 20, 2010
New Caterpillar (NYSE:CAT) CEO Likes Growth Prospects of Company
Doug Oberhelman, who recently took over the reins of Caterpillar (NYSE:CAT), is attempting to generate positive feelings about the company, saying he sees little chance there will be a double-dip recession, and confirms guidance for 2012 which had been given in 2009.
Oberhelman said, “We don’t think the world has ended. We think there is going to be fantastic growth in our industries in the future.”
He also said Caterpillar executives are positive about the global economy, and see it growing going forward, with little chance of another recession.
For 2012, Oberhelman said guidance continues to be earnings of $8 to $10 a share on revenue between $55 billion to $60 billion.
These comments were made in his first meeting with analysts since taking over as CEO in June.
This sounds way too optimistic to me, and doesn't take into account recent data showing the economy is either slowing extremely, or never moved out of the recession in the first place.
We have to remember that the government throwing hundreds of billions into the economy doesn't have anything to do with the underlying reasons for the recession, and as results show, once it worked its way through, the economic weakness remains.
The only reason I see for the optimism shown by Oberhelman is the comments made by the Federal Reserve that they're ready to do it all again if the economy begins to falter, and that has already started to happen.
With voters already outraged over the irresponsible government spending, it's hard to believe they'll do it all over again, but this administration and Ben Bernanke don't have any checks or balances, or restraint, when it comes to monetary policy, and that doesn't bode well for America, even if it gives a false impression we've moved out of the recession.
Oberhelman said, “We don’t think the world has ended. We think there is going to be fantastic growth in our industries in the future.”
He also said Caterpillar executives are positive about the global economy, and see it growing going forward, with little chance of another recession.
For 2012, Oberhelman said guidance continues to be earnings of $8 to $10 a share on revenue between $55 billion to $60 billion.
These comments were made in his first meeting with analysts since taking over as CEO in June.
This sounds way too optimistic to me, and doesn't take into account recent data showing the economy is either slowing extremely, or never moved out of the recession in the first place.
We have to remember that the government throwing hundreds of billions into the economy doesn't have anything to do with the underlying reasons for the recession, and as results show, once it worked its way through, the economic weakness remains.
The only reason I see for the optimism shown by Oberhelman is the comments made by the Federal Reserve that they're ready to do it all again if the economy begins to falter, and that has already started to happen.
With voters already outraged over the irresponsible government spending, it's hard to believe they'll do it all over again, but this administration and Ben Bernanke don't have any checks or balances, or restraint, when it comes to monetary policy, and that doesn't bode well for America, even if it gives a false impression we've moved out of the recession.
JPMorgan (NYSE:JPM) Likes Newmont (NYSE:NEM), Freeport (NYSE:FCX), Caterpillar in Near Term
In a report from JPMorgan (NYSE:JPM), they advised investors to focus on companies which would benefit from an economic rebound, including commodity companies like Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) and Newmont Mining (NYSE:NEM), and those providing equipment for them like Deere & Co. (NYSE:DE) and Caterpillar (NYSE:CAT).
Some other companies noted were CMS Energy Corp. (NYSE:CMS), Entergy Corp. (NYSE:ETR), and Ashland (NYSE:ASH), among a number unrelated to raw materials.
The report focuses on what JPMorgan called the “Circle of Life,” which refers to companies holding assets which follow cycles of peaking, breaking down, bottoming and recovery, said the banker.
What seems to be the major problem with the premise is it's completely based on JPMorgan's guess that the U.S. economy will actually recover, which most data show it isn't, and taking away the stimulus, probably has never left the recession.
JPMorgan Chief U.S. Equity Strategist Thomas J. Lee, said this in the report, “We remain confident that the U.S. economy is unlikely to enter a ‘double-dip’ scenario. It is more appropriate to focus on the areas that are likely to benefit as activity levels normalize.”
That is so unlikely as to not be taken seriously, but even as the recession continues, that doesn't mean some of these companies may prove to be profitable.
Newmont, for example, will no doubt surge, as the price of gold continues to rise, and possibly those providing equipment and machinery to miners and agriculture, like Caterpillar and Deere, could also move higher as demand continues to grow. But that should probably be looked at as long-term scenarios rather than short-term, as far as machinery providers go.
The weak housing market could possibly offset the revenue and earnings from big equipment companies, but they at least have some positive support in some of the segments.
Some other companies noted were CMS Energy Corp. (NYSE:CMS), Entergy Corp. (NYSE:ETR), and Ashland (NYSE:ASH), among a number unrelated to raw materials.
The report focuses on what JPMorgan called the “Circle of Life,” which refers to companies holding assets which follow cycles of peaking, breaking down, bottoming and recovery, said the banker.
What seems to be the major problem with the premise is it's completely based on JPMorgan's guess that the U.S. economy will actually recover, which most data show it isn't, and taking away the stimulus, probably has never left the recession.
JPMorgan Chief U.S. Equity Strategist Thomas J. Lee, said this in the report, “We remain confident that the U.S. economy is unlikely to enter a ‘double-dip’ scenario. It is more appropriate to focus on the areas that are likely to benefit as activity levels normalize.”
That is so unlikely as to not be taken seriously, but even as the recession continues, that doesn't mean some of these companies may prove to be profitable.
Newmont, for example, will no doubt surge, as the price of gold continues to rise, and possibly those providing equipment and machinery to miners and agriculture, like Caterpillar and Deere, could also move higher as demand continues to grow. But that should probably be looked at as long-term scenarios rather than short-term, as far as machinery providers go.
The weak housing market could possibly offset the revenue and earnings from big equipment companies, but they at least have some positive support in some of the segments.
Thursday, August 19, 2010
Caterpillar (NYSE:CAT) Sales Soar from June to July
Global retail sales for Caterpillar Inc. (NYSE:CAT) surged in the period from June 10 and July 10, rising by 32 percent over the same period last year.
China as been the catalyst behind the sales, increasing 41 percent in July, 36 percent in June, and 38 percent in May.
There was also growth in the Middle East and Europe, although at a more modest 19 percent clip.
Year-over-year, worldwide sales for Caterpillar have risen 11 percent, following over 17 months of declines.
There are concerns for the overall sector, including Deere and Company (NYSE:DE), which enjoyed an increase in earnings of 47 percent in the last quarter, but has analysts and investors unconvinced on whether these numbers are really sustainable.
China as been the catalyst behind the sales, increasing 41 percent in July, 36 percent in June, and 38 percent in May.
There was also growth in the Middle East and Europe, although at a more modest 19 percent clip.
Year-over-year, worldwide sales for Caterpillar have risen 11 percent, following over 17 months of declines.
There are concerns for the overall sector, including Deere and Company (NYSE:DE), which enjoyed an increase in earnings of 47 percent in the last quarter, but has analysts and investors unconvinced on whether these numbers are really sustainable.
Thursday, July 22, 2010
Caterpillar (NYSE:CAT) Demolishes Analysts' Estimates, Increase Guidance
Caterpillar Inc. (NYSE:CAT) exceeded analysts' expectations by a large amount this quarter, as revenue for its four global regions increased for the period.
Earnings for the second quarter increased to $707 million, or $1.09 a share. Analysts were looking for $0.85 a share. Profits last year reached $371 million, a gain of over 90 percent this year. Revenue was up to $10.4 billion, a major improvement over the same quarter last year where they generated $8 billion in revenue.
Segments which performed the strongest including energy, mining and infrastructure-related equipment. Regions generating the biggest increase in sales included Asia/Pacific and Latin America.
Kent Adams, Cat Financial president and vice president of Caterpillar Inc., said this, "During the second quarter, portfolio quality began to show signs of improvement as economic conditions around the world continued to improve. Our focus in 2010 has been in three key areas: serving our Caterpillar customers and dealers, managing the portfolio and ensuring we have ample liquidity. While there are still economic concerns around the world, we are well positioned to support our customers as the recovery gains momentum."
CEO Doug Oberhelman also gave improved guidance for 2010, saying, "There are significant economic concerns around the world that we are watching closely, orders have continued to outpace our shipments, and we expect to increase production in the second half of the year."
Most the areas that the company excelled in came from good prices in the quarter, in relationship to mining, and building programs from the government for infrastructure projects.
Prices have fallen for commodities this quarter, and infrastructure projects in some areas have been cut back on.
Those factors could hold the company back from growth for the remainder of the year, as the economic outlook continues to be gloomy around the world, despite the assertions of an ongoing recovery, which really isn't happening.
Earnings for the second quarter increased to $707 million, or $1.09 a share. Analysts were looking for $0.85 a share. Profits last year reached $371 million, a gain of over 90 percent this year. Revenue was up to $10.4 billion, a major improvement over the same quarter last year where they generated $8 billion in revenue.
Segments which performed the strongest including energy, mining and infrastructure-related equipment. Regions generating the biggest increase in sales included Asia/Pacific and Latin America.
Kent Adams, Cat Financial president and vice president of Caterpillar Inc., said this, "During the second quarter, portfolio quality began to show signs of improvement as economic conditions around the world continued to improve. Our focus in 2010 has been in three key areas: serving our Caterpillar customers and dealers, managing the portfolio and ensuring we have ample liquidity. While there are still economic concerns around the world, we are well positioned to support our customers as the recovery gains momentum."
CEO Doug Oberhelman also gave improved guidance for 2010, saying, "There are significant economic concerns around the world that we are watching closely, orders have continued to outpace our shipments, and we expect to increase production in the second half of the year."
Most the areas that the company excelled in came from good prices in the quarter, in relationship to mining, and building programs from the government for infrastructure projects.
Prices have fallen for commodities this quarter, and infrastructure projects in some areas have been cut back on.
Those factors could hold the company back from growth for the remainder of the year, as the economic outlook continues to be gloomy around the world, despite the assertions of an ongoing recovery, which really isn't happening.
Tuesday, July 20, 2010
Exxon (NYSE:XOM) Extends Lubricant Agreement with Caterpillar (NYSE:CAT)
Caterpillar (NYSE:CAT) and ExxonMobil Corp. (NYSE:XOM) announced they've come to a multyear agreement to extend the existing lubricant contract.
Exxon will continue to manufacture lubricants for dealers and factories of Caterpillar under the deal.
Caterpillar will continue to work with Exxon as their exclusive supplier, which includes 33 private-label lubricants. The products are used in final drives, hydraulics, engines and transmissions.
Exxon closed Monday's trading session at $58.43, a gain of $0.47, or 0.81 percent. Caterpillar closed at $64.80, gaining $0.86, or 1.35 percent.
Exxon will continue to manufacture lubricants for dealers and factories of Caterpillar under the deal.
Caterpillar will continue to work with Exxon as their exclusive supplier, which includes 33 private-label lubricants. The products are used in final drives, hydraulics, engines and transmissions.
Exxon closed Monday's trading session at $58.43, a gain of $0.47, or 0.81 percent. Caterpillar closed at $64.80, gaining $0.86, or 1.35 percent.
Thursday, July 15, 2010
Citigroup (NYSE:C) Prefers Cummins (NYSE:CMI) Over Caterpillar (NYSE:CAT)
Citigroup analysts maintained their "Hold" rating on Caterpillar (NYSE:CAT), while at the same time saying they prefer competitor Cummins (NYSE:CMI) in the heavy machinery sector.
“Following recent positive revisions to Cummins (NYSE: CMI) estimates, we raise our 2010 EPS est. on CAT to $3.25 (from $3.05) largely on better near-term growth in key emerging markets. Note key competitor, Komatsu, today raised its FY3/11 sales forecast by 3% (entirely in its 1H ending 9/30; 2H was left unchanged), and noted demand for construction and mining equipment is currently running well ahead of its previous outlook in Asian and Latin American markets.”
“CMI Remains Our Favorite Heavy Machinery Play – While both CAT and CMI stand to benefit from emerging market growth theme, we continue to prefer shares of CMI (today raised dividend 50%) over CAT, as we expect CMI’s key developed world end-markets (notably N.A. heavy truck) to rebound more quickly than CAT,” said Citi.
Even so, Citigroup did raise their price target on Caterpillar from $68 to $71.
“Following recent positive revisions to Cummins (NYSE: CMI) estimates, we raise our 2010 EPS est. on CAT to $3.25 (from $3.05) largely on better near-term growth in key emerging markets. Note key competitor, Komatsu, today raised its FY3/11 sales forecast by 3% (entirely in its 1H ending 9/30; 2H was left unchanged), and noted demand for construction and mining equipment is currently running well ahead of its previous outlook in Asian and Latin American markets.”
“CMI Remains Our Favorite Heavy Machinery Play – While both CAT and CMI stand to benefit from emerging market growth theme, we continue to prefer shares of CMI (today raised dividend 50%) over CAT, as we expect CMI’s key developed world end-markets (notably N.A. heavy truck) to rebound more quickly than CAT,” said Citi.
Even so, Citigroup did raise their price target on Caterpillar from $68 to $71.
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