Caterpiller (CAT) reported lower sales in its latest third quarter results, yet managed to deliver EPS of $0.64 which beat analyst expectations of just $0.06.
An interesting note from their release was that despite lower voluem sales, the company was able to exert pricing power for its products.
Thus the company appears to have been pretty disciplined, and confident, during the weak quarter.
Importantly, Caterpillar also believes that the worst may now be past, which for CAT never really got that bad to be frank.
Excluding $0.75 of redudancy costs, they now expect EPS of $1.85 – $2.05 per share for 2009, which is an improvement on the low-end from their previous guidance of $1.15 – $2.25 per share.
Sales are then expected to rise 10 – 25% in 2010 over the “midpoint of the 2009 outlook range”.
Caterpillar: “We believe the third quarter marked the low point for Caterpillar sales and revenues in what has been the toughest recession since the 1930s. We are seeing encouraging signs that indicate a recovery may be underway,” Owens said. “However, the world economy is still facing significant challenges. There is uncertainty about the timing and strength of recovery.”
Thus the company, whose products represent capital spending, has provided a promising signal in terms of the global economy. Check out the entire release below.