Half Yearly Report

RNS Number : 7915P

Caterpillar Inc

22 July 2010

 



Caterpillar Inc.

2Q 2010 Earnings Release

                                                                                                July 22, 2010

FOR IMMEDIATE RELEASE

Caterpillar Second-Quarter Profit up 91 Percent, Sales and Revenues Increase 31 Percent;

Raises 2010 Outlook for Sales and Revenues and Profit

            PEORIA, Ill.- Caterpillar Inc. (NYSE: CAT) today reported a second-quarter profit of $1.09 per share, an increase of $0.49 per share from a profit of $0.60 per share in the second quarter of 2009.  Profit of $707 million was 91 percent higher than second-quarter 2009 profit of $371 million.  Sales and revenues of $10.409 billion were up 31 percent from $7.975 billion in the second quarter of 2009. 

            "We've been highly focused on three things this year-significantly increasing production in response to higher demand from our customers, particularly in developing economies, aggressively managing costs and driving better cash flow," said Caterpillar CEO Doug Oberhelman. "You can see the results in our second quarter-sales and revenues increased substantially, operating profit as a percent of sales more than doubled, and Machinery and Engines operating cash flow and our debt-to-capital ratio strengthened.  Our employees, dealers and suppliers are doing a great job ramping up to support customers.  The increase in our sales from first to second quarter 2010 was one of the most significant quarter-to-quarter increases in our history," Oberhelman added.

      Sales and revenues were up $2.434 billion from the second quarter of 2009.  Sales volume improved $2.259 billion, price realization was favorable $187 million, and the impact of currency added $23 million.  Financial Products revenues were down $35 million.  Profit was up $336 million from the second quarter of 2009.  The increase was primarily the result of higher sales volume, improved operating efficiencies and favorable price realization, partially offset by higher taxes, provisions for incentive compensation and the absence of $110 million of LIFO inventory decrement benefits from the second quarter of 2009.

Outlook

The company is improving its outlook for 2010 by raising the sales and revenues range and increasing profit expectations.  Sales and revenues are now expected to be in a range of $39 to $42 billion, with a midpoint of $40.5 billion.  The increased 2010 profit outlook is a range of $3.15 to $3.85 per share, with a midpoint of $3.50 per share.   The previous sales and revenues outlook was a range of $38 to $42 billion, and the previous profit outlook range was $2.50 to $3.25 per share.

"We're very pleased to increase our outlook for 2010.  It reflects an increase in sales and revenues and a more significant increase in profit-a result of our continuing focus on cost management and profit improvement," Oberhelman said. "While there are significant economic concerns around the world that we are watching closely, orders have continued to outpace our shipments, and we expect to increase production in the second half of the year," Oberhelman added.

"We continue to be very positive about the longer-term prospects for many of the industries we serve-like mining, energy, infrastructure, electric power and rail.  This year we have made several announcements related to increasing capacity and expanding our line-up of products and services, " Oberhelman said. 

The strategic initiatives announced include:

§ A new excavator facility to increase production capacity in the United States.

§ An agreement to acquire Electro-Motive Diesel (EMD), which has the largest installed base of diesel-electric locomotives in the world, for $820 million.   

§ A multi-year investment of nearly $700 million supporting mining customers, including a full line of mining shovels and capacity expansion for mining trucks made in the United States and India.

§ A 400-percent increase in excavator production capacity over the next several years in Xuzhou, China.

§ A new facility for small wheel loader and backhoe loader manufacturing in Brazil. 

"We expect these investments will position the company for continued global leadership and growth," added Oberhelman.

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 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) imposition of significant costs or restrictions due to the enactment and implementation of health care reform legislation and proposed financial regulation 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 under "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 and in Part II of our Form 10-Q filed with the SEC on May 3, 2010 for the quarter ended March 31, 2010.  These filings are available on our website at www.cat.com/sec_filings. 

Click here to view Caterpillar Inc.'s complete 2^nd Quarter 2010 financial results release issued July 22, 2010.

http://www.rns-pdf.londonstockexchange.com/rns/7915P_-2010-7-22.pdf

 

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