Letting the CAT out of the bag
Which company uses the name of one animal and shortens it using the name of another, completely different animal?
This was the question that stumped everyone in the finals of a local quizzing league a couple of years ago. As a kid who grew up playing with the backhoe tractor toy, this was an easy one for me.
Today, I follow Caterpillar & its nemesis JCB closely not only as a fanboy but also to understand the macroeconomics of the world. And in a sure sign of global economic growth, CAT bulldozed/crushed analysts estimates and reported better than expected third-quarter numbers.
CAT’s profit surge was helped by increased demand for equipment and strong sales in China. Profits saw a four-fold increase to $1.06 Billion, or $1.77 per share. Revenue surged 25% YoY to $11.4Bil. Asia-Pacific region reported a 31% increase in sales with nearly half of it coming from China (thanks to increased building construction and infrastructure investment). Sales improved 27% in North America.
The only dampener to all this is CAT’s $2 billion IRS bill and possible criminal charges for its massive tax scandal that saw federal agents with search warrants at its headquarters 7 months ago. Caterpillar faces a possible public humiliation & backlash if it is found guilty of tax evasion.
