While Competitors Still Fearing Another Recession, Cat (CAT) Says Full Steam Ahead
Caterpillar’s (NYSE: CAT) chief financial officer Ed Rapp is looking beyond the economic crisis in Europe.
After reporting solid earnings and sales growth last week, the company announced earnings are expected to grow by 25 percent to $9.25 per share in 2012. For investors getting enthusiastic about that figure, don’t forget the company has estimated earnings will more than double to $15-$20 per share by 2015.
Mr. Rapp pointed out U.S. is only in its second year of recovery after watching the business cycle flat line. “We are just two years into it,” Mr. Rapp said Thursday in an interview with Bloomberg. “If you go back into history, our cycle is six, seven years.” Other analysts believe the business cycle acts in ten-year spans.
Mr. Rapp noted many businesses have been just trying to stay afloat over the past couple of years. The exec sees a spike in demand coming as companies look to replace older equipment and machines. “That catch-up in demand, that replacement cycle in the U.S. and Europe, is going to play out...the tailwind is going to be there,” Mr. Rapp stated.
To meet rising demand, Caterpillar has made a number of acquisitions and has plans to build additional factories in the U.S., China. Indonesia, and Thailand.
Shares of CAT closed Thursday's session down 0.17, but are up 21.79 percent year to date.
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After reporting solid earnings and sales growth last week, the company announced earnings are expected to grow by 25 percent to $9.25 per share in 2012. For investors getting enthusiastic about that figure, don’t forget the company has estimated earnings will more than double to $15-$20 per share by 2015.
Mr. Rapp pointed out U.S. is only in its second year of recovery after watching the business cycle flat line. “We are just two years into it,” Mr. Rapp said Thursday in an interview with Bloomberg. “If you go back into history, our cycle is six, seven years.” Other analysts believe the business cycle acts in ten-year spans.
Mr. Rapp noted many businesses have been just trying to stay afloat over the past couple of years. The exec sees a spike in demand coming as companies look to replace older equipment and machines. “That catch-up in demand, that replacement cycle in the U.S. and Europe, is going to play out...the tailwind is going to be there,” Mr. Rapp stated.
To meet rising demand, Caterpillar has made a number of acquisitions and has plans to build additional factories in the U.S., China. Indonesia, and Thailand.
Shares of CAT closed Thursday's session down 0.17, but are up 21.79 percent year to date.
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