BUCYRUS

Caterpillar (CAT) reported decent results Friday that showed strong growth in revenue and earnings, but also revealed cost pressures inherent in its business. During the quarter, sales jumped roughly 37% thanks primarily to recent acquisitions, while profits expanded 44% from the same period a year-ago. Though we are pleased with Caterpillar’s top line performance, management noted that cost pressures continue to intensify, specifically freight and material costs (steel, etc.) as well as investments in R&D and capacity. Further, the firm noted that its recent acquisition of Bucyrus will negatively impact full year profit by $0.50 per share as a result of upfront dealer-related integration costs, a stiff headwind. We’re also somewhat puzzled by management’s comments regarding China in its press … Read more