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What Caterpillar's Earnings Mean for Mutual Fund Investors (CAT)

Shauna O'Brien Jan 27, 2015

Shares of Caterpillar Inc. (CAT) tumbled on Tuesday after the company released its fourth quarter financial results and a weak outlook. Here’s what the news means for mutual fund investors.

CAT’s Earnings in Brief

Earnings

The company reported earnings of $757 million, or $1.23 per share, down from $1.00 billion, or $1.54 per share, in the year prior. Adjusted earnings were $1.35 per share, which fell below analysts’ view of $1.55 per share.

Revenue
Revenue fell to $14.24 billion from $14.40 billion last year. Analysts expected to see revenue of $14.18 billion.

Outlook
Looking ahead to FY2015, the company expects to see revenue of about $50 billion and adjusted earnings of $4.75 per share. Analysts expect to see $55.01 billion in revenue and $6.67 per share in earnings.

Commodities Hurting CAT’s Outlook

Caterpillar’s weak outlook is a direct impact of weak commodity prices, energy prices and the stronger dollar. Since CAT sells its equipment to companies in the energy and commodity industries, profits are expected to decline.

Investors interested in CAT may want to wait a quarter or two for the company to right the ship.

Mutual Funds to Watch

Investors interested in CAT may be interested in the funds listed below. These funds currently have the largest stakes in the company.

Symbol	Mutual Fund	Stake
VTSMX	Vanguard Total Stock Market Index	1.69%
VFINX	Vanguard 500 Index	1.08%
WASCX	Ivy Asset Strategy	0.83%

The Bottom Line

The funds listed above allow investors to gain exposure to CAT while remaining diversified. Investors interested in CAT may also be interested in General Electric (GE) and Deere & Co. (DE).