=Caterpillar (CAT) reported earnings on Tue 25 Oct 2016 (b/o)

Caterpillar beats by $0.09, misses on revs; lowers FY16 guidance, below consensus; 2017 sales outlook not be significantly different than 2016, consensus EPS slightly higher :

• Reports Q3 (Sep) earnings of $0.85 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $0.76; revenues fell 16.4% year/year to $9.16 bln vs the $9.88 bln Capital IQ Consensus
  • The decrease in revenue was primarily due to lower sales volume, resulting from lower end-user demand attributable to continued weak commodity prices globally and economic weakness in many developing countries
  • While sales for both new equipment and aftermarket parts declined in all segments, most of the decrease was for new equipment. The unfavorable impact of price realization also contributed to the decline
  • Sales declined in all regions
  • Operating profit for the third quarter of 2016 was $481 million, compared with $925 million in the third quarter of 2015. The decrease of $444 million was primarily due to lower sales volume, resulting from lower end-user demand attributable to continued weak commodity prices globally and economic weakness in many developing countries. In addition, restructuring costs and price realization were unfavorable.
• Co lowers FY16 guidance, sees EPS of $3.25, excluding non-recurring items, vs. $3.53 Capital IQ Consensus Estimate, from $3.55; sees FY16 revs of $39.0 bln vs. $40.13 bln Capital IQ Consensus Estimate, from $40.0-40.5 bln
• Caterpillar preliminary outlook for 2017 is that sales and revenues will not be significantly different than 2016 (consensus EPS slightly higher and rev slightly lower)

The possibility of a commodity collapse apparently wasn't on Doug Oberhelman's mind when he took over as CEO at Caterpillar in 2010. Between then and 2013, he plowed nearly $10B into plants and equipment, just as miners began shelving buying plans amid retreating commodity prices. Adding to that, Chinese growth began slowing, and then oil prices collapsed. Oberhelman's company is now facing an unprecedented fourth straight year of declining sales, and while the stock has bounced nicely this year, it's still 25% below its 2012 peak. Glass half full: CAT continues to be the world's largest construction and mining equipment seller, and is gaining market share. The workforce has been trimmed 20% over the past four years, creating a more nimble company ready to handle to next upturn.