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.