Caterpillar Beats Earnings and Revenues in 4Q

Caterpillar Inc. (CAT) announced its fourth quarter (4Q) earnings for fiscal year 2013 (FY13) in pre-market hours, and beat analysts’ estimates for revenues and earnings per share (EPS). The stock is trading is up more than 6%.

The heavy machinery manufacturer posted EPS of $1.54, beating EPS estimates by $0.26. Revenues were down 10.5% year-over-year (YoY), coming in at $14.4 billion, but beat estimates by $790 million for the quarter. The company also announced the intention to complete its $7.5 billion buyback program over the first quarter of 2014, and approved an additional $10 billion in buybacks that will conclude sometime in 2018.

Caterpillar, whose financial performance has been suffering since the beginning of the year, came through at the end after implementing severe cost-cutting measures. The company closed down some plants and reduced activity at others, and laid off roughly 13,000 employees, as it missed its estimates quarter after quarter.

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Caterpillar: Inventory Build-Up Causing Orders To Dry Up

Caterpillar Inc. (CAT) is the bellwether for the machinery manufacturing industry. It designs, manufactures, markets and sells heavy machinery and equipment to the construction, mining and power generation industries.

The company operates on a global scale, and its performance is tied to macroeconomic conditions in different countries worldwide. For this reason, Caterpillar’s order growth and dealer inventory levels are considered a leading economic indicator.

CAT’s three business segments – Construction Industries, Power Systems, and Resources – together accounted for almost 94% of the company’s overall revenues in 2012. Each segment contributed roughly a third of total revenues, and a slowdown in any one segment can affect the company’s bottom-line significantly.

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Caterpillar Keeps on Cutting

The mining industry moved too far too fast on elevated Chinese demand. Now, miners are pulling back—that's left equipment makers like Caterpillar (NYSE: CAT  ) with little choice but to follow suit. However, as the excesses are cleaned up, the foundation of a rebound is being built.

Coal miner Cloud Peak Energy (NYSE: CLD  ) has managed to remain profitable while most of its competitors have been bleeding red ink. The company's well situated mines in the ultra-cheap Powder River Basin are one big help. But so are the company's cost control efforts.

  

For example, the miner reduced its capital expenditure budget by over 35% this year. Cloud Peak managed this by doing some of the obvious things, like delaying projects. But it has also been extending the life of its equipment and buying used instead of new. Caterpillar noted this industrywide trend. Read more

Caterpillar to close W.Va. highwall miner plant

Caterpillar Inc. is closing a highwall miner plant in southern West Virginia and moving production to a facility in Pennsylvania. Media outlets report that the company announced the move on Monday. Caterpillar says its plant in Beckley will close by mid-2014. Production will be shifted to the company's plant in Houston, Pa.

The Beckley plant employs about 40 workers. Caterpillar says the workers will be offered a severance package and transitional support. Read more.

Caterpillar Inc. (CAT) Earnings Preview: Q3 2013 Profit Falls On Sluggish Mining Demand

Caterpillar Inc. (NYSE:CAT), the world's largest maker of construction and mining equipment, is expected to report a drop in profit for a fourth straight quarter due to low capital spending from mining companies and inventory reduction by dealers.

Caterpillar, which announces third-quarter earnings at 7:30 a.m. EDT on Wednesday, before U.S. markets open, is likely to report net income of $1.11 billion, or $1.76 a share, on revenue of $14.35 billion, based on the average estimate of analysts surveyed by Thomson Reuters.

In the same period a year earlier, net income was $1.70 billion, or $2.54 a share, on $16.45 billion in revenue. Excluding one-time items, Caterpillar is expected to report earnings of $1.68 a share. Read more

Caterpillar to Close Kilgore, Texas, Mining-Equipment Plant

Caterpillar Inc. (CAT) said it will to close its Kilgore, Texas, assembly plant in response to falling demand for mining machinery and relocate Kilgore's production work to plants in Kansas and Wisconsin.

About 100 workers are expected to lose their jobs in the shutdown, which is scheduled for completion by year-end. The Kilgore plant makes dippers and ballast boxes used in giant electric-powered mining shovels. Ballast-boxes production will shift to Caterpillar's plant in South Milwaukee, Wis., while dippers will be moved to a plant in Wamego, Kan.

"We recognize this will impact our work force and their families, but after considering a number of options and alternatives, we have concluded we need to take this step to achieve a more sustainable, long-term cost structure," a Caterpillar spokeswoman said in a written statement Tuesday. Read more.

Things Are Falling Apart For Caterpillar

The last couple of years have not been very kind to Caterpillar Inc. (CAT). After a poor performance in the third quarter of the fiscal year 2013, Caterpillar revised its future guidance for the fourth quarter as well as for the fiscal year 2014. I aim to identify the factors behind the poor performance in the third quarter of the fiscal year 2013. Moreover, I have studied the future prospects of the company in order to determine whether or not it presents itself as a profitable investment opportunity.

The company reduced its 2013 outlook after the weak results of the fiscal year 2013. What are the factors that put pressure on the top and bottom lines of the company?

The company announced third quarter sales and revenues of $13.42 billion. This is a decline from $16.45 billion earned in the third quarter of the fiscal year 2013. Read more.