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.
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where CAT advanced for three days, in of 361 cases, the price rose further within the following month. The odds of a continued upward trend are .
The RSI Indicator entered the oversold zone -- be on the watch for CAT's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 60 cases where CAT's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that 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 Aroon Indicator entered an Uptrend today. In of 266 cases where CAT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Momentum Indicator moved below the 0 level on April 16, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on CAT as a result. In of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for CAT turned negative on April 10, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at .
CAT moved below its 50-day moving average on April 25, 2024 date and that indicates a change from an upward trend to a downward trend.
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 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 71, 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 Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued 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 Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to slightly better than average 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 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