Dividend.com: Year of the CAT

Caterpillar's Results Get an Asian Boost

Caterpillar(CAT Quote) has been a big beneficiary of Asia's recent build-out. The company delivered a solid second-quarter earnings report, and also increased its guidance.

CAT reported that machinery sales ramped up 50% during the quarter. Management sees higher steel and commodity prices as still a main concern for the company going forward. The company is working with suppliers to reduce those material costs. Plans are in place to raise prices 5% to 7% worldwide, effective January 2009.

Earnings for the year are expected to be $6 per share, with revenue of $50 billion. That's above earlier estimates for profit of $5.64 to $6.18 per share on revenue of $47.2 billion to $49.5 billion.

Caterpillar has a 1.97% dividend yield, based on last night's closing price of $73.23. We think these shares are fairly attractive, but do not have them on the recommended list. Our concern is that the global economic slowdown may finally catch up to CAT in the next few quarters. We'll be keeping tabs on CAT's news, and will let you know if we issue an upgrade. American Express a Mess

American Express(AXP Quote)) delivered much worse-than-expected numbers last night. The company's 38% drop in second-quarter earnings would've been bad enough, but then management essentially pulled guidance for the rest of the year.

One of our concerns about AXP that we mentioned in a previous article was the newest client exposure it was pursuing. In a way to gain market share, the company approved new clients who were not necessarily credit-worthy in their system. This poorly-timed strategy is now costing the company, which has set aside $600 million to cover bad loans.