Unusual Options Activity Fri 12/1/23

The following options are exhibiting notable trading, potentially indicating changing sentiment toward the underlying stocks, and/or potentially representing positioning for increased volatility.

Bullish Call Activity:

• ELF Dec 125 calls (volume: 1630, open int: 340, implied vol: ~102%, prev day implied vol: 87%). Shares moving higher in sympathy with strong Ulta Beauty earnings. Co is expected to report earnings late January.
• FLWS Jan24 10 calls are seeing interest with the underlying stock up 5% (volume: 5060, open int: 10, implied vol: ~50%, prev day implied vol: 41%). Co is expected to report earnings early February.
• BROS Dec 28 puts  are seeing interest with the underlying stock up 5% (volume: 3460, open int: 10, implied vol: ~44%, prev day implied vol: 42%). Co is expected to report earnings late February.
• CAT Dec 265 calls (volume: 4690, open int: 90, implied vol: ~25%, prev day implied vol: 24%). Co is expected to report earnings late January.
  

Bearish Put Activity:

• RPHM Dec 5 puts are seeing interest with the underlying stock up 4% (volume: 2200, open int: 110, implied vol: ~551%, prev day implied vol: 424%). 1780 contracts traded in a single transaction. Co is expected to report earnings early March.
• BMBL Feb24 12 puts (volume: 2840, open int: 2720, implied vol: ~49%, prev day implied vol: 46%). 2K traded in a single transaction. Co is expected to report earnings early March.
  

Sentiment: The CBOE Put/Call ratio is currently: 0.89, VIX: (12.73, -0.19, +1.0%).
December 15 is options expiration -- the last day to trade December equity options.

=Caterpillar (CAT) reported earnings on Tue 23 Oct 2018 (b/o)

Caterpillar beats by $0.01, beats on revs; reaffirms FY18 EPS guidance

• Reports Q3 (Sep) earnings of $2.86 per share, excluding non-recurring items, $0.01 better than the S&P Capital IQ Consensus of $2.85; revenues rose 18.4% year/year to $13.51 bln vs the $13.28 bln S&P Capital IQ Consensus.
• Co reaffirms guidance for FY18, sees EPS of $11-12, excluding non-recurring items, vs. $11.66 S&P Capital IQ Consensus. 
• Most end markets continue to improve. Order rates and backlog remain healthy.
• In the fourth quarter, price realization, operational excellence and cost discipline are expected to more than offset higher material and freight costs, including tariffs.
• At the end of the third quarter of 2018, the order backlog was $17.3 billion, about $400 million lower than the second quarter of 2018, with decreases across the three primary segments.

Earnings this week : Oct 22 - 26, 18 (wk 43)

With 17% of the S&P 500 having reported quarterly results, reported earnings are up 22%; 81% have beat on the bottom line but only 51% have traded higher in response.

This week marks the first of three very heavy weeks of earnings reports -- almost 1/3 of the S&P 500 will report quarterly results.

Monday (October 22):

• Pre-Market: HAL, HAS, IQV, KMB, LII, PII
• After-Hours: ACC AMTD BRO CDNS CR ELS HLX HMST HNI HSTM HXL IBTX LOGI MC NBTB RNST SFNC SLM SPN SSB ZION

Tuesday (October 23):

• Pre-Market: ABG ALKS ARCH ASTE  ATI AVY AXE BIIB  CAT CIT CNC DGX EDU FBC FCB FITB FNB GATX GLW GPK HBAN HOG HUBB JBLU LMT LPT MBFI MCD MMM NEE PCAR  PHM PNR PPBI RF SLCA SNV TRU UTX VZ WAT XRX
• After-Hours:  AGR AMP BXMT CB CHFC CNI COF CSGP CSL EQR EW FCF FMBI HA HIW IEX ILMN IRBT JNPR LRN MANH MKSI NAVI NBHC NDLS NTB NWE RHI ROIC RRC SEIC SIX STL TER TRMK TSS TXN UCBI UMBF USNA VAR VMI WRB ZIXI

Wednesday (October 24):

• Pre-Market: AB ALXN APH AVX BA BABY BCO BKU BOKF BPOP BSX CHKP CRS DTE EVR FCX FSV GD GRA HLT IR ITW LAD LH MHO MKTX NDAQ NOC NSC NYCB OC PB POL QSR RES ROL SCHN SCL SIRI SLAB SLGN SMPL STM T TDY THR TMO TNC TPH TRVG TUP TZOO UMC UPS
• After-Hours:  ABX AEM AFL AGNC AHL AKR ALGN ALGT AMD ANIK ARI ASGN AX AXS AZPN CCMP CLB CLGX CLS CMRE CTXS CURO  CUZ CVBF CVRR DLB DRE ECHO EFX EIG ELY EQC ETH F FARO FFIV FNF FR FTI FWRD GG GGG GHL ICLR KN KRA KRC LJPC LM LSTR LVS MEOH MLNX MSA MSFT MTH NEU NGD NGVT NOW OII ORLY PKG PLXS PS PTC RJF SAVE SITC SNBR SRPT SUI TILE TMK TRN TSLA UNM V VRTX WHR WPG WRI WSBC XLNX  (largest:  Ford Motor (F), Microsoft (MSFT), Visa (V), Advanced Micro (AMD) and Tesla (TSLA) )

Thursday (October 25):

• Pre-Market: AAL AAN ABB AEP AIMC ALK ALLE ALLY ARD ASPS AXTA BANC BC BEN BMS BMY BUD BWA CCE CELG CFR CFX CMC CMCSA CME CMS COLB COP COR COWN CPG CRI CRR CSTM CTS DLX DNKN EIGI EME ENTG EQM EQT FAF FBP FCFS FCN GLOP GPI GRUB GWB HEES HSY IMAX IP IRDM IRM KIM KKR LANC LAZ LDOS LEA LECO LKQ LUV MCK MCRN MMC MMYT MNRO MO MRK MTRN NEM NLSN NOK NRZ NVCR NVT OAK OCN ODFL ORI PAG PATK PDS PRLB PTEN PX RCL RS RTN SAH SCG SHOP SHW SILC SJR SPG SPGI SWK SXC TAL TECK THRM TROW TSCO TWTR  UBS UBSI UNP USG VC VLO VLP VLY WM WNS WSO WST WWE XEL
• After-Hours:  ACTG AJG AKS AMZN AQ ARLO AUY AVT BGG BMRN BOOM BOOT BVN BYD CA CBLK CENX CERN CINF CLD CMG COLM CPT CUBE CUBI CVA CXP CY DECK DFS DLR DORM ELLI EMN ENVA EXPE FBHS FE FHB FII FIX FLEX FSLR FTV GCAP GDI GILD GOOG HIG HLI HTA HTH HUBG INT INTC INVA ISBC JEF KEX LEG LMAT LOGM LPLA LSCC MAT MERC MHK MMSI MPWR MSTR NATI NOV NR NTGR OFC OMCL OSIS PFG PFPT POWI PRO PSMT REG RGA RMD RSG SAM SBCF SGEN SIGI SIVB SNAP SPSC SWN SYK TMST UHS VCRA VLRS VRSN VVI WDC WRE

Friday (October 26):

• Pre-Market:  ALV AON B CHTR CL COG COL FELE GBX GRC GT GVA LPNT MCO PFS POR PSX PSXP R ROP SBSI SMP TEN TOT  VRTS VTR WETF WY ZBH

-=Caterpillar (CAT) reported earnings on Tue 24 Apr 2018 (b/o)

Caterpillar beats by $0.72, beats on revs; raises FY18 EPS by $2.00/sh, above consensus 

• Reports Q1 (Mar) earnings of $2.82 per share, excluding non-recurring items, $0.72 better thanthe Capital IQ Consensus of $2.10; revenues rose 30.9% year/year to $12.86 bln vs the $11.99 bln Capital IQ Consensus
  • The increase was primarily due to higher sales volume driven by improved end-user demand across all regions and most end markets as well as favorable changes in dealer inventories
  • Strong end-user demand and favorable changes in dealer inventories drove higher sales volume across the three primary segments with the largest increase in Construction Industries
• Co raises guidancefor FY18 primarily due to growing demand for products and services., sees EPS of $10.25-11.25 vs. $9.15 Capital IQ Consensus Estimate, up from $8.25-9.25
  • Construction Industries -- The co expects broad-based growth in all regions in 2018, with the biggest drivers being continued strength for construction activity in North America and infrastructure development in China
  • Resource Industries -- The co believes global economic conditions and favorable commodity price levels will drive miners to increase capital expenditures in 2018 for both equipment replacement cycles and expansions
  • Energy & Transportation -- Sales into Oil and Gas applications are expected to increase in 2018, led by continued strong demand for reciprocating engines for well servicing and gas compression applications in North America

=Caterpillar (CAT) reported earnings on Thur 25 Jan 2018 (BMO)

Caterpillar beats by $0.38, beats on revs; guides FY18 EPS upside (mid-point of guidance is easily above expectations)

• Reports Q4 (Dec) earnings of $2.16 per share, excluding non-recurring items, $0.38 better than the Capital IQ Consensus of $1.78; revenues rose 34.7% year/year to $12.9 bln vs the $12.01 bln Capital IQ Consensus.
  • Co issues upside guidancefor FY18, sees EPS of $8.25-9.25, excluding non-recurring items, vs. $8.29 Capital IQ Consensus Estimate (Note the mid-point is easily above consensus)
• The increase in Q4 sales was primarily due to higher sales volume, mostly due to improved end-user demand
• In addition, favorable changes in dealer inventories contributed to increased sales volume
• The improvement in end-user demand was across all regions and most end markets. The favorable change in dealer inventories was primarily due to a decrease in the fourth quarter of 2016, compared to dealer inventories that were about flat in the fourth quarter of 2017

By segment...

• The largest sales volume increase was in Construction Industries, mostly due to higher end-user demand for construction equipment and the favorable impact of changes in dealer inventories
• Energy & Transportation's sales volume increased due to higher demand across all applications. Sales volume for Resource Industries increased due to higher end-user demand for equipment and aftermarket parts. Favorable price realization, primarily in Construction Industries and Resource Industries, also contributed to the sales improvement. Financial Products' revenues were about flat
• Sales increased across all regions with the largest increase in North America
• Sales improved 46% in North America primarily due to higher end-user demand for both equipment and aftermarket parts. Changes in dealer inventories were favorable as dealer inventories decreased in the fourth quarter of 2016 and increased slightly in the fourth quarter of 2017
• EAME sales increased 38% primarily due to higher end-user demand for equipment and favorable price realization
• Asia/Pacific sales increased 22% primarily due to higher end-user demand for construction equipment. About half of the sales improvement in Asia/Pacific was in China resulting from increased building construction and infrastructure investment
• Sales increased 39% in Latin America due to stabilizing economic conditions in several countries in the region that resulted in improved end-user demand from low levels, as well as favorable changes in dealer inventories

Back to its 2018 forecast...

• Caterpillar is beginning 2018 with strong sales momentum resulting from strong order rates, lean dealer inventories and an increasing backlog
• Additionally, there are positive economic indicators across most of the world and in many of the company's end markets
• Caterpillar is preparing its factories and suppliers to be ready for continued growth, while remaining focused on managing with a flexible and competitive cost structure that should enable the company to respond quickly if economic fundamentals change
• Construction Industries -- The company expects growth in 2018 with some tempering in the latter part of the year, largely due to anticipated seasonality of sales in China.
• Resource Industries -- The company believes that global economic momentum and increasing commodity prices are restoring miners' business confidence and financial health
• Energy & Transportation -- Sales into Oil and Gas applications are expected to increase in 2018, led by reciprocating engines for gas compression and well servicing in North America.

=Caterpillar (CAT) reported earnings on Tue 25 July 2017 (b/o)

Caterpillar beats by $0.23, beats on revs; guides FY17 EPS above consensus, raises revenue guidance above consensus :

• Reports Q2 (Jun) earnings of $1.49 per share, excluding non-recurring items, $0.23 better than the Capital IQ Consensus of $1.26; revenues rose 9.6% year/year to $11.33 bln vs the $10.96 bln Capital IQ Consensus.
• As a result of increased demand across many end markets and disciplined cost control, Caterpillar is raising its 2017 outlook. Some risks remain in the outlook, including weakness in the Middle East and Latin America, as well as geopolitical and commodity risk
• Co issues upside guidance for FY17, sees EPS of $5.00 vs. $4.32 Capital IQ Consensus Estimate
• Meanwhile, the co raised its FY17 sales guidance to $42-44 bln vs. $40.74 bln Capital IQ Consensus Estimate, up from $38-41 bln, which was given in April 2017

Back to the quarter...

• The 10% in increase in YoY sales was primarily due to higher sales volume, with the largest increase in Construction Industries mostly due to higher end-user demand for construction equipment
• Sales volume for Resource Industries increased due to improved end-user demand for aftermarket parts and the favorable impact of changes in dealer inventories. Energy & Transportation's sales were higher mostly due to increased demand for aftermarket parts for reciprocating engines. Favorable price realization in Construction Industries also contributed to the sales improvement. The unfavorable impact of currency was mostly the result of a weaker euro and British pound. Financial Products' segment revenues were about fla
• Sales increased in Asia/Pacific, North America and Latin America, and were about flat in EAME
• Caterpillar's financial position continued to strengthen. Machinery, Energy & Transportation  operating cash flow was $2.0 billion during the quarter, and ME&T's debt-to-capital ratio improved to 38.6 percent, compared with 41.7% at the end of the first quarter of 2017

=Caterpillar (CAT) reported earnings on Tue 25 Apr 2017 (b/o)

Caterpillar beats by $0.65, beats on revs; guides FY17 EPS above consensus, revs above consensus:

• Reports Q1 (Mar) earnings of $1.28 per share, excluding non-recurring items, $0.65 better than the Capital IQ Consensus of $0.63. Excluding restructuring costs, first-quarter 2017 profit per share was $1.28, double first-quarter 2016 profit per share excluding restructuring costs of $0.64 per share; revenues rose 3.8% year/year to $9.82 bln vs the $9.27 bln Capital IQ Consensus.
  • The increase was primarily due to higher sales volume, with the most significant increase in Resource Industries mostly due to higher end-user demand for aftermarket parts. Sales volume for Energy & Transportation increased slightly; Construction Industries' sales volume was about flat; Financial Products' segment revenues increased 2 percent.
  • Asia/Pacific sales increased 12 percent primarily due to an increase in construction equipment sales in China; Higher commodity prices and increased mining production favorably impacted demand for aftermarket parts in Australia; Sales increased 14 percent in Latin America primarily due to stabilizing economic conditions; North America sales were flat as higher demand for aftermarket parts was offset by lower end-user demand for new equipment and the unfavorable impact of changes in dealer inventories as dealers increased inventories more in the first quarter of 2016 than in the first quarter of 2017.
• Co issues upside guidance for FY17, sees EPS of approx $3.75, excluding non-recurring items, vs. $3.26 Capital IQ Consensus Estimate; sees FY17 revs of $38-41 bln (Prior $36-39 bln) vs. $38.24 bln Capital IQ Consensus Estimate.
  • Restructuring costs expected in 2017 are significantly higher than the prior outlook primarily due to ongoing manufacturing facility consolidations. The company expects to incur about $1.25 billion of restructuring costs in 2017, an increase of $750 million from the prior outlook, as the current outlook now includes restructuring costs for recently announced actions at manufacturing facilities in Gosselies, Belgium, and Aurora, Illinois.

=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.

Caterpillar (CAT) is retreating from mining

• A commodity boom gone bust and generally sluggish economic growth eviscerated sales and profits at the Peoria,Illinois-based manufacturer of mining machinery, oil-drilling equipment and construction vehicles. Annual revenue has plunged nearly 40 percent from a peak of $65.88 billion in 2012, forcing Cat to shed tens of thousands of workers and close several plants.

 

(Bloomberg)—Caterpillar is exploring options for some mining products, including a sale or plant closure, and plans to stop making track drills as the biggest mining equipment maker navigates its longest ever down-cycle.

The Peoria, Illinois-based company will stop taking new orders for its room and pillar products, which serve a segment of underground soft-rock mining customers, as it pursues strategic alternatives, it said yesterday. As many as 155 jobs will be cut as a result, and about 40 will be eliminated in Denison, Texas, from the track drill exit and other restructuring, it said.

“These moves, which align with Caterpillar's ongoing restructuring, will allow us to focus resources on those areas of the business that provide the highest, sustainable growth and best long-term returns," said Denise Johnson, group president with responsibility for resource industries.

The round of cutbacks comes after Caterpillar lowered its forecast for 2016 sales and earnings in July for the second time in three months as demand for mining and energy equipment fails to rebound after a slow start to the year. Improving commodity prices haven't been enough to revive demand from miners and energy companies, which have been cutting costs to shore up profit after raw materials from copper to crude slid last year.

The underground mining products under review include continuous miners, feeder breakers and coal haulage systems.

Besides divestment, another option is the possible closure of the plant in Houston, Pennsylvania, where the room and pillar products are made, the company said.

As part of a push to streamline manufacturing, the company also plans to start repurposing later this year its Winston-Salem plant in North Carolina to rail from mining. Manufacturing of some components used in large mining trucks will move to an existing facility in Decatur, Illinois, it said.

The cutbacks represent a small portion of Caterpillar's revenue and will allow the company to free up resources for other products, Stanley Elliott, an analyst at Stifel Nicolaus, said by telephone from Richmond, Virginia.

“It does say that Caterpillar remains committed to fine tuning its divisions and wanting to invest in areas of the business where it feels it has a competitive advantage," Elliott said. “It's about highest and best use of capital.”

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.

Long trade : CAT (6/14)