You have to figure that Caterpillar is one of the best tells on the global economy, and, well, it just told a good story.Shares of the earth-mover are up 5% after the company smashed estimates on both the top and bottom line.
EPS of $1.71 was well ahead of estimates of $1.55.
Revenue of $15.7 billion was well ahead of estimates of $15 billion.
Even more importantly, the outlook sounds great.
The preliminary outlook for 2012 sales and revenues is based on improving, but slow, growth in the developed parts of the world with continuing improvement in sales from what are currently low levels. Growth in developing countries in 2012 is expected to be similar to 2011, supporting higher sales of our products and services. We expect sales and revenues to improve 10 to 20 per cent from the 2011 outlook of about $58 billion. The 2012 outlook includes a full year of Bucyrus-related sales of about $5 billion, up from a partial year of about $2 billion in 2011.
“We’re having a great year in 2011, and 2012 is shaping up to be better. Our leadership team is working on plans for next year, and it looks like 2012 will see improvements in sales and revenues across our businesses,” Oberhelman added. “We are continuing to increase production levels for many of our products and expect that supply will remain tight in 2012. That’s why we are making strategic investments in our business to position Caterpillar for continued success well beyond 2012,” Oberhelman said. “Of course, we realise the world faces economic uncertainty and risk. A key part of our planning process is to make sure we’re prepared if the situation turns negative. Each of our businesses prepares ‘trough’ plans—a standard practice at Caterpillar—to help us act faster should we need to take action,” Oberhelman added.
And here’s what they say about China:
China’s economy averaged 9.4 per cent growth in the first three quarters of 2011, and we expect past policy tightening will slow full-year growth to 9.3 per cent. Inflation appears to have peaked, and liquidity growth has slowed to a rate consistent with past easing. We expect no further policy tightening this year.