Caterpillar missed both earnings and revenue expectations for the third quarter. Lower-than-expected end user demand took a toll on its quarterly performance.
The construction machinery and equipment company reported Q3 adjusted earnings of $2.66 a share, which is well below analysts’ expectation of $2.83 (based on Zacks consensus estimate).
Revenue for the quarter fell -6% year-over-year to $12.8 billion, compared to analysts’ estimate of $13.4 billion (based on Zacks consensus estimate).
Volume faced headwinds as dealers lowered inventory by $400 million in the reported quarter, after having increased inventories by $800 million in the year-ago quarter. End-user demand turned out to be lower than anticipated.
Sales at each of Construction Industries, Resource Industries, Energy & transportation, and Other segments declined by -7%, -12%, -2%, and -2% respectively from the prior year quarter.
For the fourth quarter, Caterpillar is expecting end-user demand to remain flat on global economic uncertainty.
For the full-year 2019, Caterpillar lowered its projection of adjusted earnings per share to a range of to $10.59-$11.09, from the prior guidance of $11.75-$12.75. Including 31 cents per share discrete tax benefit related to U.S. tax reform, the earnings guidance is at $10.90-$11.40. Caterpillar anticipates modesty lower sales in 2019.
The RSI Oscillator for CAT moved out of oversold territory on April 26, 2024. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 26 similar instances when the indicator left oversold territory. In of the 26 cases the stock moved higher. This puts the odds of a move higher at .
The Momentum Indicator moved above the 0 level on May 09, 2024. You may want to consider a long position or call options on CAT as a result. In of 83 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for CAT just turned positive on May 10, 2024. Looking at past instances where CAT's MACD turned positive, the stock continued to rise in of 48 cases over the following month. The odds of a continued upward trend are .
CAT moved above its 50-day moving average on May 17, 2024 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CAT advanced for three days, in of 364 cases, the price rose further within the following month. The odds of a continued upward trend are .
CAT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 10-day moving average for CAT crossed bearishly below the 50-day moving average on May 01, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CAT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for CAT entered a downward trend on May 13, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 70, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. CAT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: CAT's P/B Ratio (9.320) is very high in comparison to the industry average of (2.077). P/E Ratio (18.079) is within average values for comparable stocks, (24.607). Projected Growth (PEG Ratio) (2.089) is also within normal values, averaging (2.737). Dividend Yield (0.014) settles around the average of (0.055) among similar stocks. P/S Ratio (2.786) is also within normal values, averaging (118.379).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a manufacturer of mining equipment, diesel and natural gas engines and industrial gas turbines
Industry TrucksConstructionFarmMachinery