Caterpillar Swings to First Quarterly Loss in 17 Years, Lowers Guidance
The world's biggest producer of construction and mining machinery,
, reported its first quarterly loss since 1992, after the bell on Monday.
The Peoria, Ill-based company posted a fiscal first quarter net loss of $112 million, or 19 cents a share, compared with a profit of $922 million, or $1.45 a share, in the year-ago period. Sales fell sharply in the quarter, down 22% from year-ago levels.
Caterpillar has struggled during the recent economic turndown, as slowing sales have forced the company to lay off more than 25,000 workers recently.
Those recent layoffs led to $558 million in charges for the company, which greatly contributed to its quarterly loss. Disregarding those one-time charges, the company would have earned 39 cents per share. That number easily bested analyst estimates of 2 cents per share.
Caterpillar greatly reduced its full-year 2009 guidance, cutting its estimate in half. It now expects $1.25 per share, before restructuring costs, on sales of $31.5 billion to $38.5 billion. In January, the company originally forecast $2.50 per share on sales of $36 billion to $44 billion.
The company said it would take further steps to conserve cash, including suspending stock repurchases and cutting capital expenditures by $3 billion. It would not rule out further job cuts.
Caterpillar shares fell 86 cents, or -2.8%, in morning trading Tuesday.
We removed shares of CAT from our "Recommended" list on July 15, when the stock was trading at $67.04. The company has a 5.51% dividend yield, based on Friday's closing stock price of $30.48.
The stock does have long-term technical support at the $22-$25 level. If the shares can firm up, we see overhead resistance in the $33-$39 price area. We would remain on the sidelines for now.
Caterpillar is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.
United Technologies Profit Falls 28%, Reaffirms Outlook
Technology products and services company
United Technologies Corporation
reported a first-quarter profit that fell 28% year over year, but still slightly bested analyst EPS estimates.
The Hartford-based company said it earned $722 million, or 78 cents per share, in the first quarter, down from $1 billion, or $1.03 per share, in the year-ago period. Overall revenue fell 12.2% to $12.25 billion.
On average, Wall Street analysts expected EPS of 77 cents per share.
United Tech stood by its 2009 full-year outlook for earnings of $4 to $4.50 per share, which it lowered back in March. These levels represent an 8% to 18% decline from full-year 2008.
The company also said it plans to make $2 billion in acquisitions this year, citing weakened stock valuations as a good opportunity to acquire other companies.
UTX shares rose $2.13, or +4.67%, in early afternoon trading Tuesday.
We have avoided the shares since our early June coverage began, when shares were trading at $67.01. The company has a decent dividend yield of 3.36%, based on last night's closing stock price of $45.81.
The stock has key technical support in the $41 price area. If the shares can firm up, we see overhead resistance around the $49-$54 price levels. We would remain on the sidelines for now.
United Technologies Corporation is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.
Coca-Cola Net Profit Falls 10% on Charges
The Coca-Cola Company
said Monday that its first-quarter profit fell 10% year over year, but its earnings results still met expectations.
The Atlanta-based company reported fiscal first-quarter net income of $1.35 billion, or 58 cents per share, down from $1.5 billion, or 64 cents per share, in the year-ago period. Excluding special one-time charges, earnings were $1.51 billion, or 65 cents per share.
Those adjusted earnings numbers matched the consensus Wall Street estimates. However, overall sales fell 3% to $7.17 billion, lower than Wall Street estimates of $7.36 billion.
On a positive note, Coca-Cola said it saw case volumes rise 2% in the quarter, with the largest improvements coming overseas in nations like India, China and Mexico.
announcement Monday that it is looking to acquire its bottling partners, speculation arose about Coca-Cola possibly executing a similar strategy. However, Coca Cola said Tuesday that it still prefers the local bottling system that it currently utilizes.
Coca-Cola shares fell 89 cents, or -2%, in late morning trading Tuesday.
We have had shares of KO on our "Recommended" list since Mar. 20, when the stock traded at $42.18. The company has a 3.70% dividend yield, based on last night's closing stock price of $44.33. We are still positive on the stock and like the name here for long-term investors. We'll keep investors posted if there is a change in our ratings.
The Coca-Cola Company is a "recommended" dividend stock, holding a Dividend.com DARS Rating of 3.5 out of 5 stars.
UnitedHealth Net Falls Slightly, but Handily Beats Expectations
, which is the largest U.S. health care insurer by market value, posted a first-quarter profit that easily beat expectations, despite falling slightly from the same quarter last year.
The Minnetonka, Minn.-based company said Tuesday morning that its fiscal first-quarter net income was $984 million, or 81 cents per share, off 1% from $994 million, or 78 cents per share, in the year-ago period. Last year, the company had more shares outstanding, which accounts for the higher EPS on lower net income. On average, Wall Street analysts expected profit of 67 cents per share.
Quarterly revenue jumped 8.4% to $22 billion year over year.
Overall membership at the health insurer rose slightly to 32.43 million, while membership in its commercial plans fell by 905,000 members from the year-ago period to 25.44 million. That commercial decline was smaller than originally expected.
The company also added more than 200,000 people to its Medicare plans in the quarter, which is already ahead of full-year 2009 estimates.UnitedHealth reaffirmed its full-year 2009 profit forecast range of $2.90 to $3.15 per share. Its shares initially rose in pre-market trading Tuesday, before falling 88 cents, or -3.68%, below Monday's closing price.
We have avoided shares of UNH since our June coverage began and the shares were trading at $33.01. The company has a low dividend yield of .12%, based on last night's closing stock price of $24.21.
The stock has technical support in the $16-$17 price area. If the shares can continue its recent momentum, we see overhead resistance at the $32 levels. We would remain on the sidelines for now.
UnitedHealth Group is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.
At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.