Caterpillar Gears Up for Q3 Earnings

By Chris Lange Updated Jan 13, 2:00AM EST · Published Oct 24, 11:15AM EDT

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Caterpillar Gears Up for Q3 Earnings — © Thinkstock

Caterpillar Inc. (NYSE: CAT) is scheduled to report its third-quarter financial results before the markets open on Tuesday. This has been the best performing Dow stock in 2016, easily beating out any other in the index by at least 7%. The question is whether Caterpillar can continue its run to close out the year, and it starts with this earnings report.

The consensus estimates from Thomson Reuters are $0.77 in earnings per share (EPS) and $9.84 billion in revenue. In the same period of last year, Caterpillar posted EPS of $0.75 and $10.96 billion in revenue.

Despite a solid second quarter, management took a cautious perspective going into the second half of the year. CEO Doug Oberhelman said the company was not expecting an upturn in important industries like mining, oil and gas and rail to happen this year.

However, Caterpillar is continuing significant restructuring plans, which are designed to bring its cost structure more in line with demand while maintaining capability to quickly serve customers when its business recovers.

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In that vein, the company recently announced that it is closing a plant in Belgium, eliminating 2,200 jobs. Analysts, always partial to restructuring that increases returns, have been kind to the company by setting some pretty low hurdles for earnings and revenues.

Prior to the release of the earnings report, analysts weighed in on Caterpillar:

Jefferies reiterated a Hold rating with an $80 price target.
Barclays has an Equal Weight rating with a $90 price target.
Goldman Sachs has a Buy rating with a $112 price target.
Merrill Lynch has a Hold rating with a $92 price target.
Credit Suisse has a Buy rating.
Citigroup has a Hold rating.

So far in 2016, Caterpillar has outperformed the broad markets with the stock up 27%. Over the past 52 weeks, the stock is up nearly 21%.

Shares of Caterpillar were trading at $86.18 on Monday, with a consensus analyst price target of $79.56 and a 52-week trading range of $56.36 to $89.87.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.