$CAT = Meow

$CAT soars 6%+ pre-market after reporting better than expected earnings and committing to but back $18 billion in stock.

Caterpillar Inc. said its fourth-quarter earnings rose 44% on lower costs and improved sales in its construction and power systems businesses that offset a continuing decline in mining-machinery revenue.

The company forecast per-share earnings for the just-started year of $5.85 and sales of about $56 billion, plus or minus 5%. Analysts polled by Thomson Reuters expected per-share profit of $5.78 and revenue of $55.27 billion.

The company's board also approved a new $10 billion stock repurchase program. Caterpillar expects to repurchase $1.7 billion of its shares in the first quarter, which will complete its previous $7.5 billion stock repurchase authorization.

"The completion of our previous program and the decision to announce a new $10 billion program are a result of our record cash flow, the strength of our balance sheet and our confidence in the long-term future of Caterpillar," Chairman and Chief Executive Doug Oberhelman said.

Reduced spending by mining companies has taken a toll on sales of mining equipment, while Caterpillar's sales of construction equipment have benefited from a recovery of home building in the U.S. The heavy-equipment maker has been closing plants that make mining equipment and laying off workers to reflect a sharp drop in demand in the sector.

Caterpillar reported a profit of $1 billion, or $1.54 per share, up from $697 million, or $1.04 per share, a year earlier. Revenue decreased 10% to $14.4 billion. Analysts polled by Thomson Reuters expected per-share profit of $1.28 and revenue of $13.64 billion.

Overall, machinery and power-systems sales fell 11%.


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)

Leave a Reply