Dow futures are higher by over 100 points following a spate of big beats among Dow components including 3M, GM, UTX, but none more so than Caterpillar which just announced blockbuster Q3 EPS of $1.95, nearly 50% higher than the $1.22 consensus estimate (and above the highest forecast), on revenue of $11.4 billion, which also was well above the $10.73 billion expected, which also was at the top end of the range.
As is customary for the heavy-industrial equipment manufacturer, Caterpillar yesterday reported its retail sales, one day ahead of earnings, and as we discussed, the number was solid with Caterpillar reporting the longest positive streak in retail sales going back 51 months.
With CAT and MCD accounting for over 100 of the 250+ Dow points today, one would think that, as CNBC has repeatedly stated today, these two companies are posting "tremendous earnings growth."
And, in a way they are... a non-GAAP way. Because while CAT reported adjusted EPS of $1.28, up exactly 100% from a year ago - almost as if it was goalseeked - something far less appetizing emerges when looking at CAT's actual, GAAP EPS, which happen to be exactly one quarter of the non-GAAP number, or $0.32, a 30% drop from a year ago.
After 51 consecutive months, the dead CAT spell is finally over.
As Caterpillar's stock continues to soar, its operations continue to decline.