Toro, Caterpillar Earnings A Mixed Bag

Caterpillar and Toro released earnings statements in recent weeks that show accelerated losses and mild gains, respectively, as both firms were impacted by the mild winter and uncertainty in the worldwide marketplace. The outlook for both companies in 2013 remains cautiously optimistic, as growth is expected to ramp up later in the year.

Equipment industry leaders Toro and Caterpillar both released earnings statements at the end of February, providing an early look into the course of 2013's economic growth – or potential lack thereof.

Toro
The Toro Company reported strong first-quarter earnings growth, driven by strong demand for large turf equipment and growth in micro-irrigation sales, the latter considered a growing niche for the Bloomington, Minnesota-based company.

Toro, which provides turf, landscape, rental, and construction equipment, as well as irrigation and outdoor lighting products, said its earnings for the quarter that ended February 1 totaled $31.4 million, or 53 cents per share, up about 58 percent from the same period a year ago, according to a February 21 report. Revenue climbed about five percent to $444.7 million.

"The optimistic outlook of customers across our businesses is encouraging, as we prepare for our primary selling season," CEO Michael Hoffman said in a statement. "Barring new economic headwinds, we anticipate the momentum our golf, landscape contractor, and micro-irrigation businesses enjoyed this past quarter will carry into spring."

Sales in Toro's residential segment slid 12 percent during the first quarter, due largely to decreased demand for snow products as a result of low snowfall, which also hurt the company's fourth-quarter results from last year. Toro's professional segment, meanwhile, increased sales 16 percent during the first quarter.

Toro also said that acquisitions made last year"?uincluding the purchase of Honeoye, New York-based Stone Construction Equipment's assets"?uare "helping create further opportunities."

Toro expects revenue to grow about four to five percent during the current fiscal year. It also raised its full-year outlook and now expects earnings to be between $2.40 and $2.45 per share. Toro previously expected fiscal 2013 earnings in the range of $2.35 to $2.40.

Caterpillar
Caterpillar Inc., the biggest maker of construction and mining equipment worldwide, said a drop in its global retail machine sales previously reported accelerated because of bigger declines in Asia and North America.

The company's global sales fell four percent year-over-year in the three months through January, the Peoria, Illinois-based company said in a February 20 filing. That compares with a one percent drop reported in the three months through December, which was the first decline in more than 2 1/2 years.

In the three months through January, Asia-Pacific sales fell 12 percent and North American sales were down 11 percent, Caterpillar said, citing numbers reported monthly by dealers. The declining sales come as China, which made up about three percent of Caterpillar sales last year, recovers from seven quarters of slower growth, and the U.S. economy struggles to grow under recent tax increases and the threat of government spending cuts to reduce debt.

A January 28 statement from the company said that gains in its sales and profit this year will come in the second half as the world economy improves, forecasting 2013 earnings of $7 to $9 a share on revenue of $60 billion to $68 billion.