Caterpillar Inc. (NYSE:CAT) announced a reorganization in its dealer and customer support divisions. These changes are designed to improve and speed the delivery of customer support while simplifying the way Caterpillar interacts with its global dealer network.
These organizational changes will drive needed simplicity to the business, further enabling us to meet customer and dealer needs by becoming more nimble, lean and responsive, said Rob Charter, Caterpillar group president with responsibility for Customer & Dealer Support. Our dealers are the best in the industry when it comes to knowing and serving our customers. These changes will help Caterpillar increase accountability at the divisional level and continue to differentiate the Caterpillar business model from our competitors.
The company is also placing added executive office emphasis on three strategic initiatives – data analytics, digital and innovation capabilities; Lean Transformation; and the Across the Table initiative. Having this additional, executive office focus complements the new structure of Caterpillars customer and dealer-facing divisions.
Mining Division Changes
As previously announced, Chris Curfman, vice president with responsibility for Caterpillars Mining Sales & Support Division is retiring, effective December 31, 2015. His division will be integrated into the existing Global Mining machine business divisions. Bringing product, operations, sales and marketing organizations together in both the surface and underground mining applications aligns well with our customers and will also enable a more effective cost structure in a challenging mining environment.
The surface mining sales and support teams will join the Hauling & Extraction Division, which will be renamed the Surface Mining & Technology Division, led by Caterpillar Vice President Tom Bluth.
The underground mining sales and support teams will join the Material Handling and Underground Division, led by Caterpillar Vice President Denise Johnson.
Customer and Dealer-Facing Organizational Changes
The company is reorganizing divisions across the company into a new structure that will improve efficiency and reduce complexity. This new organizational structure will enable the company to more quickly deliver on its previously announced Across the Table goals.
Our team will be more responsive, agile and better positioned to work with our dealers as we serve our customers, Charter said.
Caterpillar Equity Analysis
Caterpillar Inc. (NYSE:CAT) opened trading today as $64.98 and is trading in the range of 64.74-65.77 today. Caterpillar’s current market cap stands at $39.16 billion.
Compared to other peers in the Farm & Construction Machinery sector, Caterpillar hasn’t performed in terms of quarterly revenue growth year over year at -0.13 vs. the industry average of 0.20. Caterpillar’s earnings per share is currently at 5.86, which surpasses the sector average of 0.67.
Caterpillar is currently covered by 25 Wall Street analysts. The mean target price is $73.24 according to First Call. This presents a solid upside to the current price of the equity. The Mean Recommendation sits at 2.9 which is based on 2 Strong Buy, 3 Buy and 17 Hold ratings.
The most recent analyst actions consisted of Societe Generale initiating the stock on June 3rd and Robert W. Baird initiating coverage with an upgrade rating back in May.
The current quarter EPS consensus estimate is .82 with revenue estimates of 11.22B. Sales are expected to drop at a 17.20% rate.
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. The companys Construction Industries segment offers backhoe, small wheel, skid steer, multi-terrain, compact track, medium and compact wheel, and track-type loaders; mini, wheel, and track excavators; track-type tractors; and select work tools, motor graders, telehandlers, soil compactors, and pipelayers, as well as its related parts for the heavy and general construction, rental, mining and quarry, and aggregates markets. Its Resource Industries segment provides electric rope and hydraulic shovels; draglines; drills; highwall and longwall miners; hard rock vehicles; articulated, large mining, and off-highway trucks; large wheel loaders; wheel tractor scrapers; wheel dozers; machinery components; and electronics and control systems for use in mining and quarry applications. The companys Energy & Transportation segment offers reciprocating engines; reciprocating engine powered generator sets; integrated systems and solutions for the electric power generation industry; and turbines and its related services, centrifugal gas compressors, diesel-electric locomotives and components, and rail-related products and services. Its Financial Products segment provides retail and wholesale financing primarily for Caterpillar equipment, machinery, and engines; offers property, casualty, life, accident, and health insurance; insurance brokerage services; and purchases short-term trade receivables. The companys All Other segments remanufactures engines and components; provides business strategy, and development, management, manufacturing, marketing, and support primarily for paving, forestry, industrial, waste, and Cat products. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Peoria, Illinois.