How Caterpillar Earnings Prove It’s a Top Dow Stock

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Caterpillar Inc. (NYSE: CAT) reported its most recent quarterly results before the markets opened on Tuesday. Over the past quarter, Caterpillar has easily been one of the top-performing Dow stocks, and this earnings report seems to affirm that.

In just the past three months, and¬†excluding Tuesday’s move, only two companies in the Dow have outperformed Caterpillar. But including this move, Caterpillar would be a very close second to Boeing, which has been far and away the best performing Dow stock in 2017 and even going further back.

The industrial goods manufacturer posted $1.49 in earnings per share (EPS) and $11.33 billion in revenue for the quarter. Consensus estimates from Thomson Reuters had called for $1.26 in EPS and revenue of $10.93 billion. In the same period of last year, Caterpillar posted EPS of $1.09 and $10.34 billion in revenue.

In terms of its segments, Caterpillar reported:

  • Construction Industries revenues increased 11% year over year to $4.93 billion.
  • Resource Industries revenues increased 21% to $1.76 billion.
  • Energy & Transportation revenues increased 5% to $3.94 billion.
  • Financial Products revenues decreased 1% to $692 million.

Back in April 2017, Caterpillar provided an outlook range for 2017 sales and revenues of $38 billion to $41 billion, but the company is now raising its full-year expectations for sales and revenues to between $42 billion and $44 billion. At the same time, Caterpillar estimates $5.00 in EPS.

The consensus estimates are $4.32 in EPS and $40.54 billion in revenue for the 2017 full year.

Jim Umpleby, Caterpillar’s CEO, commented:

Our team delivered an impressive quarter. As demand increased, we continued to control costs and generated higher profit margins. While a number of our end markets remain challenged, construction in China and gas compression in North America were highlights in the quarter. Mining and oil-related activities have come off of recent lows, and we are seeing improving demand for construction in most regions.

Shares of Caterpillar were last seen trading up nearly 5% at $113.53 on Tuesday, after hitting a new 52-week high of $114.00 earlier in the day. The consensus analyst price target is $107.87, and the 52-week low is $78.74.