Caterpillar Q2 2012 Earnings Breakdown!

So I was able to put in a little work last weekend.  I listened to CAT and Westport's conference call.  Both calls were very positive.  I want to focus on Caterpillar's numbers tonight.  LOL!  Only because I wrote down the key stats of the call. Westport will come later.  Apple and Weatherford are still in the Que.  I can happily say all of these stocks are up quite substantially since the last time I wrote!

I know a lot of you are looking for a Westport (WPRT) update.  The progress towards natural gas infrastructure and the adoption of this phenomenal technology is gaining tremendous momentum!  If that isn't enough of a sneak peak, then all I can say is there was a reason for the +12.86% pop last Friday 08/03.  Westport has a great future!  I can say that my largest stake in all of my brokerage accounts is in Westport Innovations.  I'm putting my money where my mouth is!

Now let's move onto the Peoria Power House!  Better known as Caterpillar! (CAT)  Another great performance.  I wouldn't expect nothing less than greatness!

Let the list begin

-Had record quarterly profits. The highest profit in it's 87 year history
-yoy $2.54 eps vs. $1.52 (earnings per share) That's a 67.10% increase vs last year!
-Sales and Revenue came in at $17.374 billion vs. $14.230 billion (a 22.0% increase vs 2011)
-Full year outlook increased from $9.50 a share to $9.60 on roughly 68-70 billion in revenue
-Inventories decreased in China, as equipment has been allocated to other areas of the world
-Backlog of equipment is still at a solid $28.2 billion (An increase of 11% vs last year)
-Gas compression business is doing quite well
-Some mining equipment have lead times into 2014
-A 31% organic growth in mining

This is a small list that I derived from the call, but this is only the start.  From what I heard Caterpillar's management is confident in their earnings outlook through 2012.  They did provide caution in China and slow growth in United States and other areas of the world for 2012, but did mention they see a brighter future in 2013.  That being said we are investing for the future earnings!  With the continued monetary easing in China and other areas of the world CAT believes this will help improve the global economy, which should spark growth in the next 12-24 months.  With the current commodity prices many companies still continue to have an appetite for CAT's equipment.  The backlog is impressive and should be a positive indicator as to the strength of this company.

In my personal opinion CAT has more than came through this quarter.  Even with the economic headwinds this company was able to generate record profits.  The management is excellent and they know how to execute to create strong results.  Although caution was given the stock has been destroyed.  At $87.22 a share the stock is trading at a P/E of 9.75 vs the S&P 500 P/E of 14.6.  This is substantially lower.  CAT should easily be trading at the same P/E level as the S&P 500.  Put that into the equation and this stock would be trading at $130.00 a share.  Last earnings call I mentioned Caterpillar should be trading at $130.00 a share by year end and I believe it still has a chance.  If anything it should break through its 52 week high of $116.95 by year end.  A 35% price appreciation in the next 5 months is definitely not out of the question. 

In the end CAT is a steal at $87 a share and should be bought at these price levels.  Once it blows through $92 a share the momentum will carrier this solid company past the $100 mark and onto its 52 week high!  Plus the stock currently pays a dividend that provides a 2.40% yield

Currently I have a nice position in Caterpillar and plan on purchasing more in the near future.  I have confidence and so should you!

Have a great night!

Clay-

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!