5 Wins in DJIA Component Earnings (CAT, KO, DD, PFE, UTX)

We have seen the earnings reports from all five DJIA components which were on deck to report this Tuesday.  We are seeing a theme here: almost all posted lower earnings from a year ago that still beat earnings estimates, but this continues the trend that it is on cost cuts and/or on much lower revenues from a year ago.  The earnings came from Caterpillar Inc. (NYSE: CAT), The Coca Company (NYSE: KO), EI DuPont de Nemours & Co. (NYSE: DD), Pfizer Inc. (NYSE: PFE), and United Technologies (UTX).

We provided details on each, with guidance where appropriate, some added color, and how well these have each done in stock performance since the June 30 close of Q2 and since the March 9 close where traders use as the end of the bear market on the index closing bell basis.

Caterpillar Inc. (NYSE: CAT) managed to blow away numbers, although be advised that there are many items in the earnings.  The heavy equipment maker posted $0.64 EPS vs $0.06 estimates, and revenues were $7.3 billion vs. $12.9 billion a year ago and vs. $7.48 billion estimates.  The cat’s meow also guided 2009 to$1.85 to $2.05 non-GAAP EPS and $1.10 to $1.30 net EPS vs. $1.49 estimates.  It sees a recovery coming in 2010 with revenues up 10% to 25% from the mid-point for 2009 as dealer inventory reductions should end next year. Shares are up over $60.00 after closing at $57.85, but remember that this stock was already up a sharp 77% since the June 30 close and up a whopping 147% since the March 9 close.

Coca-Cola, or The Coca Company (NYSE: KO), posted $0.81 EPS as revenues fell almost 5% to $8.04 billion versus estimates of $0.82 EPS on $8.11 billion in revenues. The beverage giant sees sentiment slowly recovering and the company said it brand Coca-Cola case volume rose 2% all in, but North America was down by 4% and Europe was down by 2%. This one was up about 15% since the June 30 close and up 45% since the March 9 close.

DuPont, or EI DuPont de Nemours & Co. (NYSE: DD), reported a rare gain in net income of $409 million vs $367 million a year ago and posted $0.45 EPS (up 12%) and while revenues fell 20% to $6.16 billion.  First Call estimates were $0.33 EPS.  DuPont also narrowed its 2009 earnings range to a new $1.95 to $2.05 EPS from a prior range of $1.70 to $2.10 EPS.  A huge beat, but on cost cutting. This one is up 36% since the June 30 close and up a whopping 119% since the March 9 close.

Pfizer Inc. (NYSE: PFE) posted $0.51 EPS and a 3% revenue drop to $11.6 billion vs. $0.48 EPS and $11.42 billion estimates.  Pfizer has also reported its post-Wyeth guidance now to $49.0 to $50.0 billion in revenues and adjusted diluted EPS of $2.00 to $2.05 EPS.  These are above prior guidance and above the $1.98 EPS and $45.3 billion in revenue estimates, but that is because of the Wyeth addition.  Analysts are very slow to adjust for merger earnings, so just treat this as an update.  Pfizer is also laying off 1,000 workers this quarter.  This one is up 21% since the June 30 close and up 45% since the March 9 close.

United Technologies Corp. (NYSE: UTX) beat earnings at $1.14 EPS vs. $1.12 estimates and said sales were down 11% to $13.4 billion vs $13.3 billion estimates.  The company raised guidance for the year, but roughly only by that $0.02 EPS it beat estimates by.  The conglomerate was up 27% since the June 30 close and up 77% since the March 9 close.

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JON C. OGG
OCTOBER 20, 2009