Caterpillar Finds Growth Abroad: Fool by Numbers
By Anders Bylund
January 28, 2008
On Jan. 25, heavy machinery heavyweight Caterpillar (NYSE: CAT) released earnings for the 2007 fiscal year -- a period ending Dec. 31, 2007.
- Domestic machinery sales were slow at 11% below the 2006 level, thanks to "the collapse in housing construction" and lower demand from rock quarries and other basic materials extractors. But outside these Yankee-Canadian borders, machinery sales increased 33%.
- The same story played out in the engines segment, only amplified: Overall engine sales improved 6% despite a hair-raising 59% North American drop.
- Our CAPS players seem to like heavy machinery a lot. Get a free CAPS account and go see what's up with that international imbalance.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Sales
|
$44,958
|
$41,517
|
8.3%
|
|
Net Profit
|
$3,541
|
$3,537
|
0.1%
|
|
EPS
|
$5.37
|
$5.17
|
3.9%
|
|
Diluted Shares
|
659.5
|
683.8
|
(3.6%)
|
Get back to basics with the income statement.
Margin Checkup
|
FY 2007
|
FY 2006
|
Change*
|
|
Gross Margin
|
27.4%
|
28.8%
|
(1.4)
|
|
Operating Margin
|
11.0%
|
12.0%
|
(1.1)
|
|
Net Margin
|
7.9%
|
8.5%
|
(0.6)
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
FY 2007
|
FY 2006
|
Change
|
|
Cash + ST Invest.
|
$1,122
|
$530
|
109.8%
|
|
Accounts Rec.
|
$8,249
|
$8,607
|
(4.2%)
|
|
Inventory
|
$7,204
|
$6,351
|
13.4%
|
|
Liabilities
|
FY 2007
|
FY 2006
|
Change
|
|
Accounts Payable
|
$4,723
|
$4,085
|
15.6%
|
|
Long-Term Debt*
|
$3,639
|
$3,694
|
(1.5%)
|
*Excluding financial services borrowings.
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Cash From Ops.
|
$7,935
|
$5,799
|
36.8%
|
|
Capital Expenditures
|
$3,040
|
$2,675
|
13.6%
|
|
Free Cash Flow
|
$4,895
|
$3,124
|
56.7%
|
|
Owner Earnings
|
$2,298
|
$2,464
|
(6.7%)
|
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap (in billions)
|
Trailing P/E Ratio
|
CAPS Rating
|
|
General Electric (NYSE: GE)
|
$345.7
|
15.8
|
****
|
|
Caterpillar
|
$42.2
|
12.4
|
****
|
|
Deere (NYSE: DE)
|
$36.5
|
21.1
|
****
|
|
Cummins (NYSE: CMI)
|
$10.0
|
13.5
|
****
|
Using the latest reported numbers from Capital IQ.
Keep your partners close and the competition in your vest pocket.
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