Caterpillar Outlook to 2015 Disappoints

Oberhelman said that the company expects 2015 sales and revenues for Caterpillar to be in a range of $80 to $100 billion. The new target is $12.00 to $18.00 in earnings per share in 2015 as well. A warning os forts was noted by saying, ” Caterpillar is ready to act if we enter a recession. We don’t think it’s likely, but if it happens, we are prepared to react and would expect to remain attractively profitable and to maintain our dividend.”

Today’s news may be a disappointment, but shares closed down almost 1% at $90.87 and the stock is down only 1.9% more at $89.04 in the after-hours session. It would seem that if this was being considered a real earnings warning then there would be more selling. For a comparison of what a $12 to $18 range per share in earnings looks like, Thomson Reuters has estimates of $9.62 EPS for 2012 and $10.51 EPS for 2013.

Perhaps the best news is that the company has specifically committed to maintaining that dividend. At almost $91 at the closing price, the dividend is about 2.2% as of now and that $2.08 per share annualized payout could rise much more down the road if Caterpillar wants to grow its payout ratio.

Caterpillar shares have traded in a range of $67.54 to $116.95 in the last 52-week period.

JON C. OGG