1st Quarter Results

RNS Number : 8037K

Caterpillar Inc

26 April 2010

 



Caterpillar Inc.

1Q 2010 Earnings Release

                                                                                                            April 26, 2010

FOR IMMEDIATE RELEASE

Improving Economic Conditions and a Focus on Execution Drive First-Quarter Profit;

Caterpillar Increases 2010 Outlook for Sales and Revenues and Profit

Order rates and production have increased and, as a result, sales and revenues are

expected to improve as the year unfolds.

PEORIA, Ill.- Caterpillar Inc. (NYSE: CAT) today reported a first-quarter profit of $0.36 per share, up $0.55 per share from a loss of $0.19 per share in the first quarter of 2009.  Excluding a tax charge of $90 million related to the recently signed U.S. health care legislation, profit in the first quarter of 2010 was $0.50 per share.  The loss of $0.19 per share in the first quarter of 2009 included $558 million of employee redundancy costs.  Excluding redundancy costs, profit in the first quarter of 2009 was $0.39 per share.  First-quarter sales and revenues of $8.238 billion were down from $9.225 billion in the first quarter of 2009.

"Economic conditions are definitely improving, particularly in the world's developing economies.  Industry activity and orders are significantly higher than last year and are at record levels in some areas.  As a result, we are hard at work ramping up production to meet increasing demand from customers," said Chairman and Chief Executive Officer Jim Owens.  "Despite the recession in 2009, we continued to invest in our facilities throughout the world, and those investments will position us for success as global growth continues.  We are also seeing strong order activity related to mining and energy, and that should be very positive for our U.S. exports as the year unfolds," Owens added.

First-quarter profit was $233 million compared with a loss of $112 million in the first quarter of 2009.  The improvement in profit was a result of lower manufacturing costs, the absence of redundancy costs and favorable price realization.  The improvements were partially offset by the impact of lower sales volume and higher taxes, including the $90 million charge related to the recently signed U.S. health care legislation.

"We are very encouraged by our performance in the first quarter.  We focused on cost management and deployment of the Caterpillar Production System-factory efficiency improved, margins improved and our Machinery business returned to profitability," Owens said.  "In addition, cash flow was positive, and we strengthened our balance sheet with continued improvement in our debt-to-capital ratio.  As a result, we are well positioned to invest for growth where needed," Owens added.

Outlook

Caterpillar is increasing its outlook for 2010 by raising the sales and revenues range and profit expectations.  For sales and revenues, the revised range is $38 to $42 billion.  The revised 2010 profit outlook is a range of $2.50 to $3.25 per share.

"The main driver behind our improved outlook is robust growth in Asia/Pacific and Latin America and continued improvement in mining and energy globally," Owens said. 

"We are increasing production schedules and expect sales to improve as we move through 2010.  We remain highly focused on execution-the deployment of the Caterpillar Production System using 6 Sigma, tight cost management, efficiently ramping up production and preparing for Environmental Protection Agency (EPA) Tier 4 emission requirements.  We expect to continue to add employees around the world to support growth and in the United States to support growing exports.  We are confident in the ability of the entire Caterpillar team-our suppliers, employees and dealers-to work together to meet growing customer demand," Owens said.

Notes: 

-       Glossary of terms is included on pages 21- 22; first occurrence of terms shown in bold italics.

-       Information on non-GAAP financial measures, including the treatment of the U.S. health care legislation tax charge and redundancy costs, is included on page 23.

For more than 85 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent.  With 2009 sales and revenues of $32.396 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.  The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.  More information is available at:  http://www.cat.com.

Caterpillar contact:  Jim Dugan, Corporate Public Affairs, [phone] (Office) or [phone] (Mobile)

FORWARD-LOOKING STATEMENTS

Certain statements in this release relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are subject to known and unknown factors that may cause actual results of Caterpillar Inc. to be different from those expressed or implied in the forward-looking statements. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements.  All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance, and Caterpillar does not undertake to update its forward-looking statements.

It is important to note that actual results of the company may differ materially from those described or implied in such forward-looking statements based on a number of factors, including, but not limited to: (i) economic volatility in the global economy generally and in capital and credit markets; (ii) Caterpillar's ability to generate cash from operations, secure external funding for operations and manage liquidity needs; (iii) adverse changes in the economic conditions of the industries or markets Caterpillar serves; (iv) government regulations or policies, including those affecting interest rates, liquidity, access to capital and government spending on infrastructure development; (v) commodity price increases and/or limited availability of raw materials and component products, including steel; (vi) compliance costs associated with environmental laws and regulations; (vii) Caterpillar's and Cat Financial's ability to maintain their respective credit ratings, material increases in either company's cost of borrowing or an inability of either company to access capital markets; (viii) financial condition and credit worthiness of Cat Financial's customers; (ix) material adverse changes in our customers' access to liquidity and capital; (x) market acceptance of Caterpillar's products and services; (xi) effects of changes in the competitive environment, which may include decreased market share, lack of acceptance of price increases, and/or negative changes to our geographic and product mix of sales; (xii) Caterpillar's ability to successfully implement Caterpillar Production System or other productivity initiatives; (xiii) international trade and investment policies, such as import quotas, capital controls or tariffs; (xiv) failure of Caterpillar or Cat Financial to comply with financial covenants in their respective credit facilities; (xv) adverse changes in sourcing practices for our dealers or original equipment manufacturers; (xvi) additional tax expense or exposure; (xvii) political and economic risks associated with our global operations, including changes in laws, regulations or government policies, currency restrictions, restrictions on repatriation of earnings, burdensome tariffs or quotas, national and international conflict, including terrorist acts and political and economic instability or civil unrest in the countries in which Caterpillar operates; (xviii) currency fluctuations, particularly increases and decreases in the U.S. dollar against other currencies; (xix) increased payment obligations under our pension plans; (xx) inability to successfully integrate and realize expected benefits from acquisitions; (xxi) significant legal proceedings, claims, lawsuits or investigations; (xxii) potential imposition of significant costs due to the enactment of health care reform legislation; (xxiii) changes in accounting standards or adoption of new accounting standards;  (xxiv) adverse effects of natural disasters; and (xxv) other factors described in more detail in "Item 1A - Risk Factors" in Part I of our Form 10-K filed with the SEC on February 19, 2010 for the year ended December 31, 2009.  This filing is available on our website at www.cat.com/sec_filings. 

Click here to view Caterpillar Inc.'s complete 1^st Quarter 2010 financial results release issued April 26, 2010.

http://www.rns-pdf.londonstockexchange.com/rns/8037K_-2010-4-26.pdf

 

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