Слайд 13 Things You Can’t Miss in Caterpillar Inc.’s Upcoming Earnings Report
Слайд 21
Backlog value: a key indicator of future potential revenue
Слайд 3Story so far
Caterpillar’s backlog is declining rapidly – In Q2, it
fell 10% sequentially and 23% year over year. Half the year-over-year decline was in its construction industries division.
Prices of key commodities like oil, coal, and iron ore have hit multi-year lows in recent months. As a result, companies in these sectors are aggressively cutting down on capital expenditures.
Слайд 4What you should watch
Backlog: I’m expecting another double-digit slump in Q3.
With mining and oil and gas already weak, a big drop in construction backlog will be a double whammy.
Order rates: Backlog could reach dangerously low levels and revenues could dry up if orders for Caterpillar’s equipment don’t pick up soon.
Слайд 52
Signs of stress in the North American construction market
Слайд 6A bleak picture
Data source: Caterpillar retail sales statistics. Chart by author
Caterpillar’s
construction-equipment sales are headed lower
Слайд 7What you should watch
While downgrading its outlook last month, Caterpillar mentioned
that “construction equipment sales are well below prior peaks in North America.”
North America is Caterpillar’s largest market, and also among its strongest. So any sluggishness will bode ill for the company, especially when international markets are already weak.
Слайд 83
Restructuring and growth plans
Слайд 9The big plan
In September, Caterpillar revealed massive restructuring plans
across all business segments that “could impact more than 20 facilities” and 10,000 people around the world.
Слайд 10What you should watch
While Caterpillar could take the biggest bite
out of mining, closure of any construction or energy and transportation facilities could mean more pain ahead for the company.
Expected savings, after accounting for restructuring costs.
R&D: Will Caterpillar spend close to 2012 record levels this year as planned earlier? What areas/products is it investing in, and how will it position the company for future growth?
Слайд 11This Could Be The Next Billion-Dollar iSecret