Caterpillar (CAT) reported 4Q earnings on Thur 28 Jan 2016 (b/o)

** charts before earnings **

** charts after earnings **

 

Caterpillar beats by $0.05, misses on revs; guides FY16 EPS above consensus, revs in-line :

• Reports Q4 (Dec) earnings of $0.74 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.69; revenues fell 22.6% year/year to $11.03 bln vs the $11.42 bln Capital IQ Consensus.
• Co issues guidance for FY16, sees EPS of $4.00 vs. $3.53 Capital IQ Consensus Estimate; sees FY16 revs of $40-44 bln vs. $43.48 bln Capital IQ Consensus Estimate.
  • The outlook for 2016 sales and revenues does not anticipate improvement in world economic growth or commodity prices
  • Sales in Construction Industries are expected to decline about 5-10% from 2015; Sales in Energy & Transportation are expected to decline about 10-15 percent from 2015; Sales in Resource Industries are expected to be down about 15-20 percent from 2015
• The 23% decrease in revenue was primarily due to lower sales volume and the unfavorable impact of currency due to continued strengthening of the U.S. dollar against most currencies, with about half of the impact from the euro
• The two most significant reasons for the decline in sales in 2015 were weakening economic growth primarily in developing countries and substantially lower commodity prices, most notably oil. While sales for both new equipment and aftermarket parts declined in all segments, most of the decrease was for new equipment
• Sales declined in all regions
  • In North America, sales decreased 26% due to lower end-user demand, primarily in Energy & Transportation, and unfavorable changes in dealer inventories, mostly in Construction Industries
  • In EAME, sales declined 20% , mostly due to lower end-user demand for products used in Energy & Transportation applications and the unfavorable impact of currency, as sales in euros translated into fewer U.S. dollars
  • Sales decreased 36% in Latin America, primarily due to widespread economic weakness across the region, which had a negative impact on construction and mining activity and demand for products used in oil and gas applications
  • The most significant decrease was in Brazil
  • Asia/Pacific sales declined 16%, primarily due to lower end-user demand for Energy & Transportation applications and products used in mining.
• Sales decreased in all segments
  • Energy & Transportation's sales declined 29% as sales decreased due to lower end-user demand and the unfavorable impact of currency. Construction Industries' sales decreased 18%, primarily due to the unfavorable impact of changes in dealer inventories as dealers decreased inventories more significantly in Q4 of 2015 compared to Q4 of 2014.