Caterpillar (CAT.US), one of the world's leading manufacturers of heavy machinery, reported results for calendar Q3 2022 today ahead of the Wall Street session open. There was some concern that as the macroeconomic outlook is deteriorating and the global economy may be heading for a recession, machinery equipment producers like Caterpillar may see some business weakness, or at least signs of it. Let's take a quick look at results
Results top market expectations
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appQuick look at results
-
EPS: $3.87 vs $3.18 expected ($2.87 in Q3 2021)
-
Revenue: $14.99 billion vs $14.43 billion expected (+21% YoY)
- Machinery, Energy & Transportation: $14.28 billion vs $13.98 billion expected (+22% YoY)
- Financial revenue: $716 million vs $721 million expected -
Operating income: $2.47 billion vs $2.01 billion expected (+46% YoY)
- Machinery, Energy & Transportation: $2.29 billion vs $1.91 billion expected
- Financial revenue: $250 million vs $223.5 million -
R&D expenses: $476 million vs $484 million (+11% YoY)
Caterpillar reported better-than-expected results in almost every headline metric, spare for slight miss in R&D expenses. In spite of rising raw material prices, supply chain issues and overall increased macroeconomic uncertainty, the company reported hefty increases in EPS and revenue, with sales in its core business growing more than 20% year-over-year. Company also said that it has returned $2 billion to shareholders via stock buybacks and dividends.
Bellwether for the global economy
Caterpillars are often seen as a bellwether for the global economy. Due to its high market share in the equipment machinery market and use of its equipment in a number of key industries (i.e. mining and construction), any deterioration in Caterpillar's business often causes concerns over the condition of the global economy. Company, however, said that no such thing took place in this quarter and it continues to see strong demand in almost every end market it is in.
Stock gains 3% in premarket
Share price responded with a 3% jump in premarket. This means that it is highly likely that the stock will launch today's cash trading above the 200-session moving average, which was tested yesterday but bulls failed to break above it. This also means that the stock may clear a mid-term resistance zone ranging around $200.00 handle, that limited upward moves in July and August. A break above would pave the way for an extension of the current upward correction and a potential test of the $217 resistance in the near future.
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
