Fly Intel: What to watch in Caterpillar earnings report

Caterpillar (CAT) is scheduled to report results of its third fiscal quarter before the market opens on Tuesday, October 23, with a conference call scheduled for 8:30 am ET. What to watch for: 1. GUIDANCE: When Caterpillar reported its second quarter results on July 30, the company raises its fiscal 2018 adjusted EPS guidance to $11.00-$12.00 from $10.25-$11.25, with a consensus estimate at that time of $10.87. Current consensus estimates sit at $11.66. 2. RETAIL MACHINES SALES: On September 14, Caterpillar reported retail machine sales up 23% on a three month rolling basis in August. For reference, retail sales of machines were up 24% in the period ending in July and up 25% in the period ending in June. The company reported world Resources Industries sales up 35% in the August-end period, compared to a July period increase of 34%. Construction Industries world sales were up 21% in the August-end period, versus the 22% increase in the prior three-month period ending in July. Total Energy & Transportation Retail Sales were up 16% in the August-end period, up from an 11% increase in the July-end period. 3. BAIRD UPGRADES CATERPILLAR TO OUTPERFORM: On September 20, Baird analyst Mig Dobre upgraded Caterpillar to Outperform from Neutral. The analyst said he believes demand growth should continue into 2019. While some markets like China are close to peak, most of its demand is still at or below mid-cycle levels, said Dobre, who raised his price target to $191 from $155 on Caterpillar shares. 4. QUARTERLY DIVIDEND MAINTAINED: On October 10, Caterpillar's board voted to maintain the quarterly cash dividend of 86c per share of common stock, payable November 20 to shareholders of record at the close of business on October 22.