Caterpillar (NYSE:CAT) Misses On Revenues, FY16 Guidance EPS Above Consensus, Revenues In-Line

Carol Harper
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Caterpillar (NYSE:CAT) Misses On Revenues, FY16 Guidance EPS Above Consensus, Revenues In-Line

Caterpillar Inc. (NYSE:CAT) reported adjusted earnings that topped the Capital IQ consensus expectations by five cents a share in the fourth quarter. On a GAAP basis, the company suffered a net loss compared to profit last year. Its revenue dipped 22.6% and fell shy of analysts’ estimations. Looking ahead, the company sees earnings above the consensus for the year 2016. The company indicated that its guidance reflected the continued weakness in commodity prices, as well as the slowdown in economic growth.

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Sales Under Pressure

Caterpillar said that its restructuring actions, operational execution and cost management were helping its bottom line. The company suffered a net loss of $87 million or a loss of 15 cents a share compared to net income of $757 million or $1.23 a share last year. On an adjusted basis, earnings per share dipped to 74 cents from $1.35.

Sales and revenue dropped 22% to $11.03 billion from $14.24 billion. While earnings topped estimates, revenue missed Capital IQ consensus of $11.42 billion. The company blamed it on weak commodity prices, as well as, the slowing economic growth in emerging markets. The mining equipment maker said that it gained traction in market position for the fifth straight year for machines as inventory levels witnessed a fall.

Well-Positioned For 2016

Caterpillar Inc. (NYSE:CAT) said that the company is well-positioned to take advantage of its product quality, which remained high, and safety levels are considered world class. Its Chairman and CEO, Doug Oberhelman, said that the company was already gaining from its recent mvoes, and once the market rebounds, it would gain further in the future.

Going forward, Caterpillar Inc. (NYSE:CAT) expects earnings of $4.00 a share for the fiscal year 2016, which was significantly higher than the Capital IQ consensus estimation of $3.53. However, the company’s revenue projection of $40 – $44 billion fell short of $43.48 billion predictions. The company indicated that its sales in construction industries, energy transportation and resources industries will to fall 5 – 10%, 10 – 15%, and 15 – 20% respectively this year.