) is set to report third quarter 2013 results on Oct 23. The
company had delivered a negative earnings surprise of 15.2% in
the second quarter. Let's see how things are shaping up for this
Factors This Past Quarter
Caterpillar's second-quarter revenues declined 16% year over year
to $14.6 billion, while earnings per share slumped 43% to $1.45.
The dismal results were due to reduced mining demand and
more-than- anticipated decline in dealer machine inventory. The
company has delivered a negative earnings surprise in all the
past four quarters, with an average of -6.96%.
Due to continued dealer machine inventory reductions during 2013,
Caterpillar trimmed its sales outlook to a range of $56 to $58
billion from the previous $57 to $61 billion. Caterpillar expects
dealers to reduce inventory by about $3.5 billion in 2013.
Caterpillar now expects to earn $6.50 per share in 2013, down
from previous earnings projection of $7.00 per share.
Caterpillar's sales declined 10% for the three months ending Aug
2013 following a 9% dip in July. With this, the construction and
mining equipment behemoth reported its ninth consecutive month of
Our proven model does not conclusively show that Caterpillar will
beat earnings this quarter. That is because a stock needs to have
both a positive Earnings ESP and a Zacks Rank #1, #2 or #3
for this to happen. That is not the case here as you will see
Negative Zacks ESP
: The Most Accurate estimate stands at $1.59, while the
Zacks Consensus Estimate is higher at $1.68. That is a difference
Zacks Rank #4 (Sell)
: We caution against stocks with Zacks Ranks #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
), Earnings ESP of +0.78% and Zacks Rank #2 (Buy).
), Earnings ESP of +8.70% and Zacks Rank #2 (Buy).
General Electric Company
) Earnings ESP of +1.85% and Zacks Rank #3
AGCO CORP (AGCO): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
INGERSOLL RAND (IR): Free Stock Analysis
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