Caterpillar Sales on a Roll - Analyst Blog
20 Mai 2011 - 3:54PM
Zacks
Caterpillar
Inc. (CAT) maintained its sales
growth trajectory in April, registering a global sales growth of
66% in the reported month, the highest so far in 2011. The monthly
sales growth was a stark improvement over the 4% decline during the
same period last year.
April
results complete a year of positive growth for the company since
May 2010, when it had reversed a long trend of global decline from
September 2008.
After
kickstarting 2011 with a 49% year-over-year jump in global sales in
January, Caterpillar has maintained the momentum with February and
March posting increases of 59% and 61%, respectively, and now April
taking the curve further to a growth level of 66%.
Region wise,
the company reported a whopping increase of 72% in Latin America,
where sales improved remarkably after declining 2% in the
year-earlier period. In the Rest of the World segment sales
improved 66% compared with a 9% growth last year.
Asia Pacific
and North America vied for the third position, reporting an
increase of 65%. Asia Pacific and North America had recorded
growth rates of 38% and 15%, respectively, a year ago. EAME
(Europe, Africa and Middle East) followed closely with a sales
growth of 64% over last year’s decline of 8% in April
sales.
The company
also reported turbine engine sales for the month of April,
registering a 25% increase globally compared with a 21% decline in
the prior-year period.
Electric
Power reported the maximum increase of 45% compared with a 14%
decline a year ago. Following the Electric Power sector was the
Industrial segment with sales up 28% in April versus a 5% growth in
the prior-year period. Petroleum sales closed in at position three
increasing 25% compared with a 29% drop in the year-earlier
period.
However, the
Marine segment witnessed sales continuing to decline at 27% after
falling 35% in the year-earlier period. The Marine sector remains
the only weak link in the Caterpillar sales growth story. Sales
growth in this category have been negative since September
2009.
During the
recently reported first quarter, Caterpillar’s revenues surged 57%
to $12.95 billion, surpassing the Zacks Consensus Estimate of
$11.20 billion. The increase in revenues was attributable to
continued economic growth and improvement from the low levels of
machine demand in the first quarter of 2010.
We expect
Caterpillar to maintain its revenue growth trajectory aided by
growth in emerging markets as well as construction and mining
activities in developing countries. Increased domestic and
international infrastructure spending, improved economic conditions
and benefits from the yet-to-be closed acquisitions will support
revenues over the next several years.
For 2011,
Caterpillar expects revenues in the range of $52 billion to $54
billion and EPS of $6.25 to $6.75, the highest annual profit in the
company’s history. However, the outlook does not include the
acquisitions of MWM Holding GmbH or Bucyrus International
Inc. (BUCY) as they have not yet
closed.
The
acquisitions are expected to close by mid 2011. We expect a
revision in guidance and our estimates once these deals conclude.
Based on the sales data so far we believe Caterpillar is well
on track to deliver its promise. We currently have a Zacks #1 Rank
(short-term Strong Buy recommendation) on the stock.
Peoria,
Illinois-based Caterpillar Inc. is the manufacturer of construction
and mining equipment, diesel and natural gas engines, and
industrial gas turbines. The company is one of the few leading U.S.
companies in an industry that competes globally from a principally
domestic manufacturing base. Caterpillar operates three divisions –
Machines, Engines and Financial Products. Caterpillar competes with
the likes of CNH Global
NV (CNH),
Komatsu
Ltd. (KMTUY) and
Volvo
AB (VOLVY).
BUCYRUS INTL A (BUCY): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis Report
CNH GLOBAL NV (CNH): Free Stock Analysis Report
VOLVO AB ADR B (VOLVY): Free Stock Analysis Report
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