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It's true the operating margin is expected to contract a bit from Tuesday's results. Latin America sales fell 31% due to lower sales volume that was only partially offset by higher prices. Higher prices also aided profitability, despite the dual headwinds of lower volumes and an unfavorable product mix. The adjusted operating profit margin for the fourth quarter is expected to be lower versus the third quarter result. All told, we believe the operating margin consensus on Wall Street needs an upward revision.
Persons: we've, James Umpleby, Umpleby, nonresidential, I've, Jim Cramer's, Jim Cramer, Jim, Justin Sullivan Organizations: Caterpillar, Revenue, CAT, U.S, North, Energy, SG, Dealers, Guidance Management, CNBC, Peterson Locations: North America, America, Europe, Africa, Asia, China, San Leandro , California
A select group of our Club holdings have recently demonstrated durable pricing power to protect profits during what continues to be a high inflation environment. For companies, elevated inflation means higher input costs — higher costs on the goods and services required to run their businesses. In a recent note, UBS acknowledged, "Inflation may trend back toward the Fed's target sooner than expected reducing the relative advantage of companies with pricing power." In fact, UBS believes that "companies with pricing power have the potential to outperform the broader market in the months ahead." Microsoft's pricing power comes down to the simple fact that they have positioned themselves as a core backbone of global productivity.
Persons: Andrew Bonfield, Jim Umpleby, we'll, Gamble, Gillette, Jon Moeller, Linde, Matthew White, White, Salesforce, Jim Cramer's, Jim Cramer, Jim, Procter & Gamble, Justin Sullivan Organizations: Federal Reserve, UBS, Caterpillar, Procter, Gamble, Linde, LIN, Microsoft, Construction Industries, Resource Industries, Energy, Transportation, Procter & Gamble, Health, Care, Investment, Management, Services Cloud, Cloud, Industries, CNBC, Procter & Locations: U.S, Australia, Canada, New Zealand, Greenbrae , California
Club holding Caterpillar (CAT) delivered another strong quarter before the opening bell Tuesday, sparking a much-deserved rally of more than 8% to an all-time high above $287 per share. Revenue in the second quarter increased 22% year over year to $17.32 billion, exceeding estimates of $16.49 billion, according to Refinitiv. On the call, management called out strong demand in both North American residential and nonresidential construction. Fortunately, China represents less than 5% of sales with weakness being more than offset by strong demand elsewhere in the Asia/Pacific region. Caterpillar dealers are independent businesses and they're not going to increase inventory levels if they aren't seeing strong demand on the near-term horizon.
Persons: , Jim Cramer's, Jim Cramer, Jim, Brendan McDermid Organizations: Caterpillar, Revenue, Financial, Construction Industries, . Resource Industries, Energy, Transportation, Machinery, Energy & Transportation, CNBC Locations: North America, America, Europe, Africa, Asia, Pacific, China, Harbor, Brooklyn , New York
Caterpillar shares turn around CAT YTD mountain Caterpillar YTD Dow component Caterpillar delivered a blowout first quarter. Caterpillar revenue in Q1 increased 16.7% year over year to $15.86 billion, exceeding estimates of $15.26 billion, according to Refinitiv. Better-than-expected operating margin of 17% was so strong, due mostly to manufacturing costs that were not as high as expected as well as higher prices. Bottom Line on CAT This was a very strong quarter from Caterpillar as business continues to benefit from pricing power that outweighs costs. Even with oil down in the quarter, Caterpillar continues to see a lot of activity and strength in new engine sales to customers.
We're making several updates to our Bullpen watch list: adding five names, including Caterpillar (CAT), and removing two. Also, adding a stock to the Bullpen does not necessarily mean we would buy it at the current price. Let's go company by company to explain the reasons behind the additions and the removals. 5 stocks added to the Bullpen This aerospace and defense company was formed in 2020 through the combination of Raytheon Company and United Technologies Corporation's aerospace business. 2 stocks removed by the Bullpen We put Barrick Gold in the Bullpen back in March, thinking investors may seek out gold stocks as a safe haven during times of crisis.
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