Caterpillar Inc (CAT) Options

CAT 2Q24 CC transcript:

https://finance.yahoo.com/news/q2-2024-caterpillar-inc-earnings-053054912.html

CAT 2Q24 results have no surprises:

https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/2q24/2q24-caterpillar-inc-financial-results.pdf

• 2Q24 sales were $16.7B, -4% YoY, with price increases not fully offsetting lower volume. CAT guided three months ago that 2Q24 would be a down quarter compared to 2Q23 (#msg-174303439).

• 2Q24 sales in the Construction segment (comprising 42% of non-financial corporate sales) were $6.68B, -7% YoY.

• 2Q24 sales in the Resources Industries (mining equipment) segment (comprising 20% of non-financial corporate sales) were $3.21B, -10% YoY.

• 2Q24 sales in the Energy & Transportation segment (comprising 46% of non-financial corporate sales) were $7.34B, +2% YoY.

• Note: The three business segments above sum to more than 100% of corporate non-financial sales due to inter-segment sales, which are removed from the total sales number.

• 2Q24 non-GAAP* EPS was $5.99, up from $5.55 in 2Q23.

• 2Q24 GAAP EPS was $5.48, down from $5.67 in 2Q23.

CAT does not provide specific guidance for sales or EPS, but it expects 2H24 sales to be slightly higher than 1H24.

*Excluding restructuring costs from non-GAAP EPS is a policy that I disapprove of because multinational, multifaceted businesses such as CAT have restructuring costs continually.

CAT is an AI play, says Barron’s:

https://www.barrons.com/articles/3-stocks-to-benefit-from-the-ai-datacenter-power-boom-7c07b498 Artificial-intelligence data centers will use much more electricity than their traditional counterparts, driving upgrades to electric-power infrastructure in a shift that offers opportunities for investors, according to Bernstein [analyst, Chad Dillard].

…Dillard said he expects Caterpillar and Cummins, which [make] both engines and power-generation equipment, to benefit as well. Each could pull in incremental revenue of more than $5 billion through 2030 as electric-power capacity is expanded. I previously posted that CAT’s mining-equipment business is a beneficiary of the transition to EVs (#msg-172040699), so CAT has a couple of “thematic” growth drivers in place.

Great news for this core holding of ours. Very positive.

CAT hikes dividend—increases buyback authorization:

https://finance.yahoo.com/news/caterpillar-inc-increases-dividend-increases-143000701.html

The new annualized dividend is $5.64 (up 8% from $5.20). At the current share price (~$330), the new payout equates to a dividend yield of 1.7%. CAT has increased its dividend for 30 consecutive years.

The new $20B buyback authorization, added to the $1.8B remaining from the $15B 2022 authorization (#msg-168886038), gives a total buyback authorization of $21.8B. If CAT implements the full buyback authorization and (for the sake of discussion) buys shares at an average equal to the current market price, the share count will be reduced by about 14%. However, there is no time limit on the buyback authorization.

Addendum re non-GAAP vs GAAP EPS:

Excluding restructuring costs from non-GAAP EPS is a policy that disapprove of because multinational, multifaceted businesses such as CAT have restructuring costs continually. In 1Q24, however, non-GAAP EPS came in slightly lower than GAAP EPS due to the exclusion from non-GAAP EPS of a one-time tax benefit.

CAT guided to lower 2Q24 sales compared to 2Q23 (see slide #17), and this is apparently what caused today’s rather sharp selloff.Additionally, CAT shares had had a big runup this year and the stock was recently trading near its all-time high.

CAT 1Q24 CC slides:

https://s25.q4cdn.com/358376879/files/doc_financials/2024/q1/1Q-2024-Analyst-Slide-Deck_Final-1.pdf

CAT reports 1Q24 results—shares_slide_on_soft 2Q24 guidance:

https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/1q24/1q24-caterpillar-inc-financial-results.pdf

1Q24 sales were $15.8B, flat YoY, with price increases offsetting lower volume. Sales in the Construction and Resources Industries (mining equipment) segments were -5% and -7% YoY, respectively, while sales in the Energy & Transportation segment were +7% YoY. The E&T segment comprised 45% of CAT’s product sales in 1Q24.

1Q24 non-GAAP EPS was $5.60, up from $4.91 in 1Q23. 1Q24 GAAP EPS was $5.75 up/down from $3.74 in 1Q23.

CAT does not provide specific guidance for sales or EPS, but it expects full-year 2024 sales to be similar to 2023. However, CAT guided to lower 2Q24 sales compared to 2Q23 (see slide #17), and this is apparently what caused today’s rather sharp selloff.

I bought Autozone shares in March 2009
Auto parts retailer who would have imagined

What a great long-term investment CAT has been. These shares are up so much of late, that CAT is now hugely overweight in a Beneficiary IRA I have that requires me to take annual Required Minimum Distributions (RMD). The CAT position is now greater than the BRK position. So, I was able this week to harvest some profits and sell a relatively small amount of the CAT position to fund this year's RMD, and my remaining CAT position is right up there with BRK and a couple of others. The stock markets enable smart long-term investors to reap huge rewards.

CAT new 52 hi

Cat Tractor is high tech

CAT closed near its ATH today. Great stuff. What a great Country!

What these ag tech dreamers pumping garbage third tier Nasdaq junk fail to understand is Cat Tractor is more ag tech than all of them combined

New ATH's for CAT seem to be almost a daily occurrence any more. Have owned a large position here for years with automatic reinvestment of all dividends, which compounds the long-term gains.

CAT new 52 hi

Yep! And she just keeps chuggin' higher & higher. If this keeps up CAT could someday pass up BRK as out largest holding.

CAT new 52 hi

And the new highs for CAT just keep on coming!

CAT new 52 week high

CAT independent director bought $110K of stock on the open market last Friday:

https://www.sec.gov/Archives/edgar/data/18230/000110465924027620/xslF345X05/tm247306-1_4seq1.xml

You don’t often see insider buying when a stock is trading within a hair of its all-time high.

CAT 4Q23 CC transcript:

https://finance.yahoo.com/news/q4-2023-caterpillar-inc-earnings-042056993.html

The stock, +5% in the PM session, is trading at an all-time high.

Excluding restructuring costs from non-GAAP EPS is a policy that I take issue with insofar as a multinational, multifaceted business such as CAT’s has restructuring costs continually. In 4Q23, however, non-GAAP EPS came in slightly lower than GAAP EPS due to the exclusion from non-GAAP EPS of one-time tax and OPEB benefits.

CAT does not provide specific guidance for sales or EPS, but it expects 2024 sales to be similar to 2023 (see slide #18 at the link in the previous message).

CAT reports 4Q23 results—completing_record_year_for sales_and_earnings:

PR:
https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/4q23/4q23-caterpillar-inc-financial-results.pdf

CC slides:
https://s25.q4cdn.com/358376879/files/doc_financials/2023/q4/4Q-2023-Analyst-Slide-Deck-FINAL-2.pdf

4Q23 sales were $17.1B, +3% YoY.

4Q23 non-GAAP EPS was $5.23, up from $3.86 in 4Q22. 4Q23 GAAP EPS was $5.28, up from $2.49 in 4Q22.

CAT new 52 week high

I’m going to do something different by comparing Cat Tractor with the Russell 2000 ETF over a two-year period
Back in 2022 I bought $50,000 of the ETF and sold all of it in early 2023
It was a matter of following the money
Large and mid cap companies started to recover from the pandemic with help from legislation to expand America’s manufacturing capacity
The American consumer did its part
The IWM is comprised mostly of flaky Russell 2000 companies with an established history of no earnings
Investors tired of the hype about their promises and potential and instead opted for shares of mature, profitable companies that pay dividends

It's an all-time high.

CAT new 52 week high

Video: Caterpillar goes all in on EVs at CES

January 15, 2024
https://chargedevs.com/newswire/video-caterpillar-goes-all-in-on-evs-at-ces/

CAT an Excellent Rise indeed!!

CAT new 52 week high

Yep! Lovin' it big time. Have had all of our CAT shares on free automatic dividend reinvestment for years.

CAT closes at all-time high.

Rrright

CAT 3Q23 CC transcript:

https://finance.yahoo.com/news/q3-2023-caterpillar-inc-earnings-041702760.html

Yep. Earnings report was fine and strong, including revenue, but then in the conference call they predicted some softness in the current quarter going forward and the share price got hammered.

CAT “beats” on 3Q23 sales/earnings—but backlog declines…

PR:
https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/3q23/3q23-caterpillar-inc-financial-results.pdf

CC slides:
https://s25.q4cdn.com/358376879/files/doc_financials/2023/q3/3Q_2023-Analyst-Slide-Deck.pdf


3Q23 sales were $16.8B, +12% YoY, beating the Wall Street consensus of $16.6B.

3Q23 non-GAAP EPS was $5.52, up from $3.95 in 3Q22, beating the Wall Street consensus of $4.80. 3Q23 GAAP EPS was $5.45, up from $3.87 in 3Q22.

CAT’s 9/30/23 order backlog was $28.1B, down $2.6B from $30.7B at 6/30/23.

CAT does not provide specific guidance for sales or EPS.

Dow Jones Heavyweights - Caterpillar & Amgen Beat The Street:

https://www.forbes.com/sites/johnbuckingham/2023/08/09/dow-jones-heavyweightscaterpillar--amgen-beat-the-street/?sh=3edd9ff74b9b

RECESSION INCOMING!!!!!! WHO PAID $293.88????

SOME DEMENTED CRACK HEAD WALL STREET FUND MANAGER????

GET YOUR MONEY OUT BEFORE ITS TOO LATE!!!!!!

CAT shares_hit_all-time_high_on_2Q23 “beat” with_robust_growth_in_all_business_segments.

2Q23 sales were 17.3B, +22% YoY. (The Wall Street consensus was $16.5B, so this was a solid beat.)

2Q23 non-GAAP EPS was $5.55, up from $3.18 in 2Q22. (The Wall Street consensus was $4.57, so this was a huge beat.)

CAT does not provide specific guidance for sales or EPS, but it expects improved sales and margins in the second half of 2023.

PR:
https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/2q23/2q23-caterpillar-inc-financial-results.pdf

CC slides:
https://s25.q4cdn.com/358376879/files/doc_financials/2023/q2/2Q-2023-Analyst-Slide-Deck-Final.pdf

7-minute video:

Caterpillar’s Sales Surge as Construction Booms:

https://www.wsj.com/articles/caterpillar-cat-q2-earnings-report-2023-1dd9702b

$CAT: $300wkly calls were at $0.02 at the open

NOW at $0.44 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THATS HOW U MAKE MONEY !!!!!!!!!!!!!!!!!!!!



GO $CAT

Earnings spotlight: Tuesday, August 1 - Merck (MRK), Pfizer (PFE), Advanced Micro Devices (AMD), Caterpillar (CAT), Starbucks (SBUX), Uber (UBER), and Altria (MO). JR Research, a Seeking Alpha analyst stated "Given relatively pessimistic analysts' estimates, the market is likely positioned for a disappointing Q2 release for Pfizer."

CAT increases dividend for 29th consecutive year:

https://finance.yahoo.com/news/caterpillar-inc-increases-dividend-142600079.html

The new annualized dividend is $5.20 (up from $4.80). At the current share price (~$243), the new payout equates to a yield of 2.1%. Although this yield is not that high, CAT has raised the dividend by 17% cumulatively ($4.44—>$5.20) in the past two years (#msg-169089779). Moreover, CAT has an active share-buyback program.

CAT—>Premiere player in transition to EVs:

What makes CAT a premiere player in the transition to EVs is not what CAT is doing with the equipment it sells to mining companies. Rather, CAT is a premier player in the transition to EVs because EVs require 6x the volume of mined materials as ICEs, which will greatly increase the demand for CAT’s heavy-duty mining equipment.

CAT’s Bernstein webcast—(50 min)—is a great listen:

https://kvgo.com/bernstein-2023-39th-annual-sdc/caterpillar-june

CAT’s CEO, Jim Umpleby said on today’s Bernstein webcast that mines operating with as few as 15-20 trucks can now benefit from autonomous equipment, despite the large capital investment (for new equipment and/or or retrofits).

Just a few years ago, a mine had to have 70 or more trucks to justify investing in autonomy, according to Umpleby.