Today before market Caterpillar has released its half year results. The world largest maker of construction and mining equipment, recorded 2Q profit that beat analysts estimates and raised its full-year earnings forecast. Its revenue increased 22% to $17.37, the earnings per share raised more than 65% to $2.54. The company based in Illinois now expects earnings per share for full year of $9.60 against a forecast in April of $9.50.
At current price the share is trading 8.5 times full year EPS, and gives a good point of entry.
Graphically the share in the past months has suffered the economic slowdown. From its historic high in February, the share has lost more than 30%. The bearish trend would be finish at contact with mid-term support of USD 79.6.
Investors with long-term strategy may enter on the stock with buy order in order to aim a return on historic highs. A stop loss will be placed at USD 78.
Caterpillar Inc. is the world's leading producer of mining construction and operation equipment, diesel and natural gas motors, and industrial gas turbines. Net sales break down by activity as follows:
- sale of machines and motors (94.5%): terracing and construction machines (power shovels, high-lifts, bulldozers, etc.), agricultural and forestry tractors, motors and turbines (for heavy trucks, boats, industrial machines, and power stations), conveyer systems, hydraulic circuits and components, etc.;
- financial services (5.2%) ;
-other (0.6%).
Net sales are distributed geographically as follows: North America (51.6%), Europe/Africa/Middle East (20.4%), Asia/Pacific (18.1%) and Latin America (9.9%).