Caterpillar jumps with record Q3 earnings

Tonka time!

Caterpillar stock surged after the company reported robust Q3/11 results that saw the company beat estimates on both the top and bottom line, as well as boost forward guidance. For the quarter the company reported profit of $1.71 per share ahead of analyst estimates of $1.54. Revenue was also higher than expected at $15.7 billion. The company noted that excluding the impacts of its Bucyrus merger, Q3 was a record quarter for the company.

CEO Doug Oberhelman noted, “Excluding Bucyrus impacts, this was also our best profit quarter in history, and year-to-date operating profit as a percent of sales was higher than any full year in more than three decades. Machinery and Power Systems operating cash flow has also been very positive, with the first nine months of the year better than any full year in our history.”

The company also issued revised and bullish guidance for the remainder of 2011 with profit of about $6.75 per share. The prior outlook ranged $6.25-6.75. The outlook includes a negative impact from the acquisition of Bucyrus of about $0.50 per share, which is unchanged from the previous outlook. Excluding the impact of Bucyrus, he expects 2011 profit of about $7.25 per share; the prior outlook expected profit of $6.75-7.25 per share.

The CEO Oberhelman also noted, "Although there is a good deal of economic and political uncertainty in the world, we are not seeing it much in our business at this point. We believe continued economic recovery, albeit a slow recovery, is the most likely scenario as we move forward.” The earnings report has positive readthrough for Canadian Caterpillar dealers, such as Finning (FTT) and Toromont (TIH).

Caterpillar (CAT : NYSE : US$91.77), Net Change: 4.38, % Change: 5.01%, Volume: 16,344,384

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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