The company reported earnings for the quarter that rose 20.5% to $927 million, from $769 million a year ago. On a per-share basis, the increase was to $1.40, from last year's $1.14. Revenue was $11.4 billion, versus $10.5 billion in the third quarter of 2006.
But the company committed the double negative of undershooting analysts' expectations somewhat -- the dart-throwers apparently had been looking for $1.43 a share -- and reining in expectations for the year. It was enough to earn Caterpillar a 5.3% haircut to its share price on Friday. Management now expects per-share earnings for 2007 to come in somewhere between $5.20 and $5.60, compared with previous expectations of $5.30 to $5.80.
And while the company noted weakness in U.S. markets, it also described "remarkable growth outside the United States, with particular strength in key industries like mining, oil and gas, electric power, and marine engines." Looking ahead to 2008, management expects that revenues will increase by 5% to 10% and profit per share will climb by 5% to 15%.
Last quarter, Caterpillar was joined by a number of big companies -- including its fellow equipment manufacturer Deere
I would be hard-pressed to explain a market that could continue to move forward amidst the punishing left-right combination of an ever-tightening credit crunch and crude-oil prices nearing $90 a barrel. Yet the companies I've mentioned are strong entities with solid market shares and internationally diverse franchises.
As for Caterpillar, while it might bend somewhat in the U.S., it clearly isn't about to break. On that basis, I'd urge Fools to consider nibbling at the company's shares on any sort of intensified pullback.