1 Winner Soars and 1 Loser Plunges

Hooray, it's earning season! Fellow stock-investing buffs rejoice! Quarterly earnings can be either encouraging or painful, but investors need to keep in mind that in the grand scheme of things, a three-month period is a really tiny window by to judge a company's operations. Today's third-quarter releases were encouraging for Boeing (NYSE: BA  ) and painful for Caterpillar (NYSE: CAT  ) , which are today's biggest winner and loser, respectively, in the Dow Jones Industrial Average (DJINDICES: ^DJI  ) .

BA Chart
BA data by YCharts.

Winner, winner
Despite battery problems and grounded 787 airplanes, Boeing's stock has been flying high this year. Boeing's the biggest winner in the Dow today by a long shot, and its stock has jumped more than 5% since its quarterly report hit the news feeds.

Boeing's stock price doesn't look set to crash anytime soon after the company posted a strong third quarter and raised guidance for the year. Let's dig into some of the highlights, starting from the top. Boeing's revenue jumped 11% compared to last year's third quarter. Boeing's overall operating margin bounced 30 basis points higher to 8.1%, led by stronger margins in its commercial aircraft segment. That will be an important factor for investors to watch going forward, because Boeing will see margin pressure as it ramps up production on its 787 Dreamliner -- a less efficient operation, currently.

It's improved margins in the quarter helped drive net earnings 12% higher year over year and brought earnings per share to $1.51. That handily beat estimates, and management raised its EPS guidance to between $6.50 and $6.65 for the year.

"Consistently strong operating performance is driving higher earnings, revenue and cash flow as we deliver on our record backlog and return increased value to shareholders," Boeing Chairman, President and CEO Jim McNerney said in a press release.

Biggest loser
Unfortunately for Caterpillar, the world's largest seller of bulldozers and excavators, continues to only dig itself a deeper hole. Its earnings were the opposite of Boeing's, and its stock is trading 6% lower at the bottom of the Dow Jones Industrial Average.

There aren't a lot of positives in Caterpillar's report, and global demand for mining equipment continues to look bleak. Caterpillar's third-quarter earnings plunged 44%, and management lowered its full year guidance to $5.50 per share, from $6.50. Its revenue declined 18% to $13 billion, and the pain looks to continue as management expects sales to be flat in 2014, give or take 5%.

"Unfortunately, order rates have not picked up much despite continuing strong commodity production," said chairman and chief executive Doug Oberhelman, according to Morningstar. "That has caused us to ratchet down our sales and revenues outlook as we have moved through 2013."

Dividend stocks can make you rich
It's as simple as that. While they don't garner the notoriety of highflying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of their quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts identified nine rock-solid dividend stocks in this free report. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2695629, ~/Articles/ArticleHandler.aspx, 12/18/2014 2:40:14 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement