If you were hoping that Caterpillar Inc. (NYSE: CAT) was going to pull a miracle out of the hat with earnings, Monday is going to be a cold day regardless of the weather. The construction and infrastructure equipment giant did manage to post a 7% sales gain. That’s where the good news stops.
Earnings were $1.08 EPS on $12.92 billion in revenue.First Call estimates were for $1.29 EPS and almost $12.8 billion inrevenues. The earnings report is inclusive of some items, but all youhave to do is glance over the release to see how bad things are looking.
The company sees a significant drop in production, and will be cuttingjobs, production and expenses. This may slash as many 20,000 workers, or 20% of its workforce.
Production volume ahead is being called "severely depressed" and youcan imagine how slow things are. The company sees earnings for 2009 of about $2.50 EPS vs $4.32 estimates, and put revenues around $40billion, which is below estimates of $47.4 billion.
It is even seeing internal pressure on customer order quality. It saidthat its accounts past due over 30 days were 3.88% compared with 2.36% atDecember 31, 2007.
This is really taking down futures and may help kill any hopes ofinfrastructure or commodities recoveries. Shares closed at $35.66 onFriday, and now are trading under $31.00 in pre-market trading.
Jon C. Ogg
January 26, 2009