3rd Quarter Results

RNS Number : 7981U

Caterpillar Inc

21 October 2010

 

Caterpillar Inc.

3Q 2010 Earnings Release

                                                                                                October 21, 2010

FOR IMMEDIATE RELEASE

Caterpillar Third-Quarter Profit up 96 Percent, Sales and Revenues up 53 Percent;

Raises 2010 Outlook and Expects 2011 Sales and Revenues to Approach $50 Billion

            PEORIA, Ill.- Caterpillar Inc. (NYSE: CAT) today reported a third-quarter profit of $792 million, 96 percent higher than the third-quarter 2009 profit of $404 million.  Profit per share was $1.22, an increase from $0.64 per share in the third quarter of 2009.  Sales and revenues of $11.134 billion were up 53 percent from $7.298 billion in the third quarter of 2009. 

            "Third-quarter results continue to demonstrate our focus on aggressively managing costs and improving cash flow, while continuing to ramp up production to meet customer demand.  Continuing economic growth in the developing world has been key to improving sales.  In addition, sales in developed countries have improved substantially after deep declines in 2009.  While demand has increased, dealer new machine inventories and rental fleets have remained relatively flat, and the age of rental fleets hasn't improved, and that should be positive for us as we move forward," said Caterpillar CEO Doug Oberhelman. 

"As business continues to improve, we are investing in growth to support our customers and reward our stockholders.  We serve industries with significant growth potential and are investing in our products, capacity and new businesses.  We're updating our product line for Tier 4 emissions, we're expanding our mining products with shovels and electric-drive trucks, we're adding capacity around the world, and we're growing into new areas such as locomotives, with our acquisition of Electro-Motive Diesel," Oberhelman added.

Sales and revenues were up $3.836 billion from the third quarter of 2009.  Sales volume improved $3.714 billion, price realization was favorable $262 million, and currency had an unfavorable impact of $107 million.  Financial Products revenues were down $33 million from the third quarter of 2009.  Profit was up $388 million, with the increase primarily the result of higher sales volume, favorable price realization and improved manufacturing costs driven by the Caterpillar Production System, partially offset by higher taxes, incentive compensation and higher research and development expenses. 

Revised 2010 Outlook

The outlook for 2010 sales and revenues is a range of $41 to $42 billion, an increase of 28 percent from 2009 at the midpoint of the range.  The previous outlook range was $39 to $42 billion.  The 2010 profit outlook is a range of $3.80 to $4.00 per share, an increase of 173 percent from 2009 at the midpoint of the range.  The previous outlook range was $3.15 to $3.85 per share.  2010 is shaping up to be one of the most significant year-over-year increases in sales and revenues in our history.

Preliminary 2011 Outlook

Our preliminary outlook for 2011 reflects sales and revenues approaching $50 billion.  Developing economies are leading our growth in 2010, and we expect them to continue to grow in 2011.  We are expecting developed countries to grow in 2011 as well, but at a slower pace than the developing world.

"So far this year, due to higher demand, we have increased our workforce by more than 15,000 people globally, including more than 6,000 full-time employees and 9,000 people added to our flexible workforce.  I am pleased that we have put so many people back to work this year, and with continued global economic growth, we will add people in 2011 but remain keenly focused on cost control.  While we are expecting positive economic growth in the United States, the recovery is weaker than we've seen historically, particularly given the depth of the 2009 recession.  To drive economic growth, we encourage government policy makers to advance pro-business initiatives and a growth agenda.  In addition, they should avoid policy decisions that may create trade tensions between the United States and other key trading partners and avoid tax policy that puts U.S. multinationals, like Caterpillar, at a competitive disadvantage compared with non-U.S. competitors," Oberhelman added.

Notes: 

-       Glossary of terms is included on pages 22-23; first occurrence of terms shown in bold italics.

-       Information on non-GAAP financial measures is included on page 24.

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, industrial gas turbines and diesel-electric locomotives.  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 3^rd Quarter 2010 financial results release issued October 21, 2010.

 http://www.rns-pdf.londonstockexchange.com/rns/7981U_-2010-10-21.pdf

 

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