hermes uk No Economic Recovery to Be See

No Economic Recovery to Be Seen CAT

You have to have a rather odd view of “improving” to deal with the report given here as “reflecting ec hermes uk onomic improvement”:

Caterpillar Inc. reported a profit in the first quarter, citing improved economic conditions, particularly in emerging markets, as the heavy machinery maker also raised its forecast for the year.

Ok, so we should have seen a beat on both revenue and earnings, right? Remember, the first quarter of 2009 was the depth of the recession the bottom if you believe the headlines.

So what did we get?

For the first quarter, Caterpi hermes uk llar reported a profit of $233 million, or 36 cents a share, compared with a prior year loss of $112 million, or 19 cents. Excluding items such as tax charges related to new health care legislation and prior year restructuring impacts, per share earnings rose to 50 cents from 39 cents.

That’s good! A profit vs. a loss; exactly what one would expect. How were revenues?

Revenue dropped 11 hermes uk % to $8.24 billion.

Analysts polled by Thomson Reuters had forecast earnings of 39 cents a share on $8.84 billion in revenue.

Uhhhhhhhh. wait a second.

Economic recovery, eh?

Machinery sales were down 1% from a year ago but I thought a year ago was the depths of the recession and we have been recovering since? So how do we get a negative year over year comparison?

Worse, in North America machinery sales were down 15% with dealer invent hermes uk ories being half of year ago levels. That is, not only is heavy equipment not selling, dealers don’t think it will be in the near future either. So how did we get big increases? Asia, up 40%. Yep, that matters, and it’s what drove the results.

Engine sales were even worse, off 28%, and even in Asia they were down, in that case 15%.

The street is cheering this report on the back of everyone and their brother pumping the company (most especially the fools on CNBS), but the facts are what they are. With no revenue increases you can argue for improving profit due to firing huge numbers of people all you want, but the top line, particularly in America, is horribly bad and does not point to any sort of turn around in construction equipment sales of any sort, nor any improvement in over the road trucks and other engine markets (such as marine).