The stock market runs the gamut from everyday, household names to extremely obscure companies in niche markets. But a company’s name recognition isn’t the most compelling reason to Buy or Sell. Some well-known companies are still great buys. Others are real duds. In today’s blog, we’ll take a look at one familiar name that released earnings just this morning, and we’ll discuss what this company could do for your portfolio today…
Caterpillar, Inc. (CAT) is a familiar name to many of us. With its yellow equipment standing out at construction sites around the world, the company has solidified its role as the leading manufacturer of construction and mining equipment. The company operates through three segments: Construction Industries, Resource Industries and Energy and Transportation. Today, Caterpillar boasts over three million products, employs more than 95,400 individuals and collaborates with 28,000 suppliers.
Shares of Caterpillar were pointing to a slightly higher open this morning, following the company’s better-than-expected first-quarter report. First-quarter sales jumped 31% year-over-year to $12.9 billion, up from $9.8 billion in the same quarter a year ago. Adjusted earnings per share surged 120.3% year-over-year to $2.82, compared with $1.28 per share in the first quarter of 2017.
The analyst community was expecting earnings of $2.07 per share on $11.93 billion in sales. So Caterpillar crushed earnings estimates by 36.2% and topped sales estimates by 8.1%.
Company management noted that the record first quarter was driven by strong demand in their regions and most end markets. In fact, construction industries sales alone soared 38% year-over-year to $5.68 billion. As a result, Caterpillar increased its outlook for fiscal year 2018. The company expects full-year earnings per share between $10.25 and $11.25, up from previous guidance for earnings per share between $8.25 and $9.25. The new guidance represents 49% to 63.5% annual earnings growth.
With earnings like these, Caterpillar maintains its Buy rating in my Portfolio Grader tool.
Portfolio Grader is a great place to discover which stocks you want to own and which stocks you want to sell today. Simply plug your holdings into this simple-to-use tool, and check out each stock’s grade from A to F. These letter grades correspond to everything from a Strong Buy recommendation to a Strong Sell recommendation. If you aren’t running your portfolio through Portfolio Grader yet, I urge you to start doing so today.