Caterpillar Inches Backwards

Numbers at Caterpillar CAT are being reduced for the year, and Chairman and CEO Doug Oberhelman appeared on CNBC's Squawk Box to talk about Caterpillar cutting their outlook and global economic trends. Highlights from the earnings call:

• Q1 EPS of $1.31 vs. $1.40 ests.


• Q1 Revs. of $13.21B vs. $13.705B ests.


• FY 2013 EPS of $7 vs. $7.68 ests.


• FY 2013 Revs. of $57B-$61B vs $62.69B ests.

Caterpillar's numbers are a reflection of many global economic trends. Even though Caterpillar's outlook is down, Oberhelman said that he still feels optimistic about future revenue because of the improving state of the global economy. "The United States is inching its way out. The rhetoric here is toned down significantly. That's a big change from the last two years. I was just in Europe last week at a huge construction equipment show. The news wasn't doom and gloom, it wasn't great, it wasn't all that good, but it certainly wasn't all that negative. And China, even with a little bit weaker number in the first quarter, the stories there are pretty good. I was just there a month ago," Oberhelman said. "So stability, I think, is the word right now; and while nobody likes that feeling we're in, certainly it's better than it's been in the last couple of years; and that gives me a little bit better confidence going forward, than I've had really since 2011." While construction is up around the world, Oberhelman said that mining is down, and that Caterpillar has lost money on the big, 100-400 ton, off-highway trucks that are used in that business, with sales off 50 percent from their peak. He called the mining industry "very soft" globally. "We just think we're looking at close to a floor here…It could always get worse, but I'm thinking we're bumping the bottom on mining," Oberhelman said. Even though mining numbers aren't great, Oberhelman said that he saw coal stabilizing and that overall he was more confident in the global economy than he has been since 2011. Oberhelman said that seeing stability around the world gave him this incite. He called Europe's economically woes old news. "Everybody knows how bad it is, and this is the first year we haven't had pieces that've really broken down," Oberhelman said. He also stated that the news in China is pretty good for Caterpillar, saying that the company's numbers are up there. While Oberhelman didn't confidently declare the global economy out of the spring swoon, he was encouraging. "The economic news is a bit, a very bit brighter. I don't want to be overly optimistic here, but it certainly feels a little better than the last two springs."