Zacks analysts believe that Caterpillar is worth considering when looking for companies that have a strong position and the prerequisites for maintaining profits in the current quarter.
This construction equipment company has beaten profit estimates multiple times, especially in the previous two reports. The average surprise gain over the last two quarters was 7.14%.
In the latest report, Caterpillar posted earnings of $3.18 per share compared to the Zacks Consensus estimate of $3 per share. Caterpillar earnings per share are up 6%. In the previous report, the company was expected to show earnings of $2.66 per share, but in fact, earnings were $2.88 per share, beating the forecast by 8.27%.
Zacks research shows that stocks with a combination of positive Expected Surprise Prediction (ESP) Earnings = (Best Estimate / Consensus Estimate) – 1) and Zacks Rank #3 (Hold) or better show earnings-per-share gains nearly 70% of the time.
Caterpillar's ESP of earnings is currently 0.37%, which suggests that analysts have grown optimistic about its short-term earnings potential. And if we combine positive ESP Earnings with Zacks Rank #3 (Hold), we get another likely increase in earnings per share above the forecast. The company's next earnings report will be published on October 27, 2022.