What to Watch For in Caterpillar's Q3 Report

Industrials

Published: October 22, 2018 12:10 pm

Last Updated: January 11, 2020 4:03 pm

Caterpillar Inc. (NYSE: CAT) is set to report its third-quarter financial results early on Tuesday before the markets open. Thomson Reuters has consensus estimates of $2.85 in earnings per share (EPS) and $13.29 billion in revenue. In the same period of last year, the company posted EPS of $1.95 in EPS and $11.41 billion in revenue.

Last month the company reported August retail sales. Total global machine retail sales rose 23% year over year, while energy and transportation sales were up 16% compared with August 2017.

Caterpillar reports machine sales in two segments. Resource industry sales rose 35% worldwide year over year in August, and construction industry sales rose 21%.

The energy and transportation segment includes products like turbines and locomotives for industries such as oil and gas production and power generation. Caterpillar’s global energy and transportation sales rose 16% compared with last August.

By region, North American sales rose the most, up 29% year over year in August, followed by Asia/Pacific (28%), Latin America (18%) and Europe/Africa/Middle East (9%).

The single biggest increase in August sales came in the company’s Asia/Pacific region, where sales of resource industry (chiefly mining) products rose 77% year over year. The second-largest sales increase also came in sales of resource industry equipment, a 43% sales jump in Latin America.

Caterpillar has underperformed the broad markets over the past 52 weeks, with its stock flat. In just 2018 alone, the stock is down nearly 17%.

A few analysts weighed in on Caterpillar ahead of the report:

Cleveland Research has a Hold rating.
Macquarie has a Sell rating.
Citigroup has an Outperform rating.
OTR Global has a Positive rating.
Robert Baird has an Outperform rating with a $158 price target.
Oppenheimer has a Market Perform rating.
Deutsche Bank has a Buy rating with a $177 price target.

Shares of Caterpillar were last seen trading at $130.66, with a consensus analyst price target of $167.86 and a 52-week trading range of $129.35 to $173.24.