Caterpillar (CAT) experiencing strong demand from energy and mining customers in emerging markets. Caterpillar indicated that new orders remain above shipments to dealers. As a result, the company expects to increase production in the back half of 2010.
Caterpillar manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide.
Growth and Income
Analysts estimate that Caterpillar will grow its earnings per share 53.5% in 2010, 41.5% in 2011, and 14.0% per year for the long term. The stock has a dividend yield of 2.6%.
CAT is a Zacks #2 Rank stock that trades at 20.3x 2010 consensus estimates and 14.4x 2011 consensus estimates.
On July 22, CAT announced sales and revenues from financial services were up 31% year-over-year to $10.41 billion. The company earned $0.99 per share, beating the Zacks Consensus Estimate by 16.5%. Caterpillar has beaten the Zacks Consensus by an average of 230% in the last five quarters (30% in the last three quarters).
Management increased its full-year guidance. It now expects revenue of $39 billion to $42 billion with a midpoint of $40.5 billion and earnings per share of $3.15-$3.85 with a midpoint of $3.50.
Its previous guidance was revenue of $38 billion to $42 billion and EPS of $2.50 to $3.25.
It is still too early for the Zacks Consensus Estimates to reflect CAT’s recent results and updated guidance, but estimates are headed higher.
Currently, the Zacks Consensus for 2010 is $3.35, and the Zacks Consensus for 2011 is $4.73. The midpoint of the company’s updated 2010 guidance is $3.50, or $0.15 above the consensus. The consensus for 2010 will need to climb 4.5% to match company’s outlook.
Last Week’s Growth and Income Zacks Rank Buys
Hasbro’s (HRB) revenues are down in 2010 because of difficult year-over-year comparisons. However, the company’s cost controls have boosted profit margins, leading to 11% earnings growth in Q2. Click here for a closer look.
JB Hunt (JBHT) is expected to grow its EPS 39% in 2010, 31% in 2011, and 12% over the long term. This Zacks #2 Rank stock trades at 23x 2010 consensus EPS estimates and 18x 2011 consensus EPS estimates. Given its expected EPS growth over the next two years, its forward P/Es are reasonable. Click here to read more.
H&R Block (HRB) shares have been beaten up in the last six months, losing nearly 40% since January. The stock looks attractively-priced at current levels and could deliver decent upside from here. The Zacks #2 Rank stock has beaten EPS estimates in the last three quarters; it has a forward P/E in the single digits, and it pays out a juicy dividend. Click here for more details.
W.W. Grainger (GWW) recently reported strong second-quarter results. The company topped expectations with sales growth of 16% and EPS growth of 35%. The company also increased its EPS guidance for full-year 2010. This Zacks #2 Rank stock trades at 17x 2010 consensus EPS estimates and 15x 2011 consensus EPS estimates. For a closer look, click here.
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!