One of the trades I entered on Tuesday was in Caterpillar Stock ahead of earnings.
Caterpillar reported earnings on Thursday Jan 28 before the markets opened that continued to show a decline in revenue. However the forecast for 2016 was more rosy including cost cutting measures which management indicated will benefit the company in the future. What was interesting is that in October 2015 they had forecast a higher revenue amount for 2016 than they did this time around. Revenue is now projected to come in at $40 to $44 billion for 2016 but earnings, due to cost cutting measures are seen as coming in at $4.00 for 2016 and $3.50 after cost cutting measures are taken into account. This is still down from 2015 which had full year earnings of $4.64 per share. Caterpillar plans to reduce their labor force by 10,000 employees by the end of 2018. For the quarter the company reported a loss of $87 million or 15 cents per share versus a profit of $1.23 per share for the same quarter in the prior year.
The rest of this trade alert is for FullyInformed members.