Earning the Cat's Meow in Q1: Fool by Numbers

On April 24, 2006, Caterpillar (NYSE: CAT  ) released Q1 2006 earnings for the period ended March 31, 2006.

  • Sales and per-share earnings blew away Street estimates. For example, analysts expected $1.05 in EPS but got $1.20 per diluted stub instead. According to a Reuters report, management attributed the gains to increased demand for commodities and a booming construction market.
  • Margins expanded across the board because of cost controls and, notably, price increases. Executives couldn't comment on whether the company would be able to maintain pricing power, saying instead in that it operates in "very competitive" markets and intends to defend its position.
  • Management upped full-year earnings guidance to $4.85-$5.20 per share, from $4.65-$5 per share. Interestingly, the increase wasn't accompanied by higher revenue guidance, which suggests that Caterpillar believes it can continue to squeeze efficiency from existing operations. Keep watching those margins, Fool.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q1 2006

Q1 2005

% Change

Sales

$8,724

$9,392

$8,339

12.6

Net Profit

--

$840

$581

44.6

EPS

$1.05

$1.20

$0.81

48.1



Get back to basics with a look at the income statement.

Margin Checkup

Q1 2006

Q1 2005

%Change

Gross Margin

30.24%

25.47%

4.77

Op. Margin

12.97%

9.07%

3.90

Net Margin

8.94%

6.97%

1.98



Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2006

Q1 2005

% Change

Cash+ ST Invest.

$806

$517

55.9

Inventory

$5,858

$5,230

12

Total Receivables

$25,990

$23,785

9.3



Liabilities

Q1 2006

Q1 2005

% Change

Total Debt

$25,868

$24,434

5.9

Accounts Pay.

$3,661

$3,978

(8)



Learn the ways of the balance sheet.

Cash Flow Checkup

Q1 2006

Q1 2005

% Change

Cash From Ops

$527

$179

194.4

Capital Expend.

$233

$165

41.2

Free Cash Flow

$294

$14

2000



Find out why Fools always follow the money.

Related Companies:

  • CIT Group (NYSE: CIT  )
  • CNH (NYSE: CNH  )
  • Cummins (NYSE: CMI  )
  • DaimlerChrysler (NYSE: DCX  )
  • Deere & Co. (NYSE: DE  )
  • Kubota (NYSE: KUB  )

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.


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