Caterpillar profit weakened by high inventory, China fraud

PEORIA, Ill., Mon Jan 28, 2013 — Caterpillar Inc., the world’s largest maker of construction equipment, posted a 55 percent drop in quarterly profit on Monday due to a charge connected with accounting fraud at a Chinese subsidiary and weak demand among its dealers.

Caterpillar’s bulldozers, tractors and other machines have been accumulating in warehouses due to slowing economies in China, Europe and the United States.

The company said it was able to sell off some of this glut in the fourth quarter, reducing the value of its inventory from the third quarter by $2 billion. Levels, however, remain $1 billion above year-ago levels, and executives forecast 2013 would be a “tough year.”

Caterpillar said earlier this month it discovered accounting fraud at a Chinese coal mining supplier it bought in 2012. Caterpillar wrote down most of the $650 million deal, zapping fourth-quarter results by 87 cents per share.

“We’re encouraged by recent improvements in economic indicators, but remain cautious,” Caterpillar CEO Doug Oberhelman said in a statement on Monday.

For the fourth quarter, the company posted net income of $697 million, or $1.04 per share, compared with $1.55 billion, or $2.32 per share, in the year-ago quarter.

Revenue fell 7 percent to $16.08 billion. Analysts expected revenue of $16.12 billion, according to Thomson Reuters I/B/E/S.

 

Caterpillar cuts outlook, sees global economy weakening

PEORIA, Ill., Mon Oct 22, 2012 –  Caterpillar Inc., the world’s largest maker of tractors and excavators, slashed its 2012 forecast for the second time this year as it warned the global economy was slowing faster than it had expected.

The company’s retail dealers are selling off inventories, rather than buying new machines, forcing Caterpillar to idle some production, executives said on Monday.

“As we’ve moved through the year, we’ve seen continued economic weakening and uncertainty,” CEO Doug Oberhelman said in a statement.

Caterpillar does not expect improvement in overall economic growth until the second half of 2013, Oberhelman added.

The statement came despite better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment to repair crumbling infrastructure. Europe and parts of Latin America remained tough regions for Caterpillar.

For bullish Caterpillar, ‘This doesn’t feel like 2008’

PEORIA, Ill., Wed Jul 25, 2012 – Caterpillar Inc., the world’s largest maker of construction equipment, raised its 2012 profit forecast on Wednesday and said that despite pockets of weakness, the global economy was improving.
The strong outlook came after Caterpillar posted a quarterly profit that easily beat Wall Street’s expectations, sending the company’s stock up 4 percent.
Fiscal improvement is still needed in Asia, Latin America and North America, but steps toward a healthier global economy have already begun, Caterpillar CEO Doug Oberhelman said.
“While we’re expecting a record year in 2012, we understand the world is facing economic challenges, and if it becomes necessary, we are prepared to act quickly,” Oberhelman said in a statement. “The good news is, this doesn’t feel like 2008.”
The company reported a second-quarter profit of $1.67 billion, or $2.54 per share, compared with $1.02 billion, or $1.52 per share, a year earlier.
Analysts on average expected earnings of $2.28 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 21 percent to $17.37 billion. Analysts expected $17.11 billion.
The company now expects to earn $9.60 per share in 2012, up from a previous forecast of $9.50.
For the year, analysts expect a profit of $9.54 per share.
Shares of Caterpillar rose 4 percent to $84.65 in premarket trading.

Caterpillar first quarter profit beats Wall Street predictions

PEORIA, Ill., Wed Apr 25, 2012 – Caterpillar Inc. reported a 29 percent rise in first-quarter profit on Wednesday and beat analyst expectations thanks to continued demand for replacement machinery in North America and growth in its mining business.

The world’s largest maker of construction machinery reported net earnings of $1.6 billion, or $2.37 per share, compared with $1.2 billion, or $1.84 per share, a year earlier.

The company said the first quarter earnings per share figure was its highest on record.

Caterpillar’s sales rose 23 percent to $16 billion during the first quarter, the company said.

Analysts on average had projected a profit of $2.13 a share, according to Thomson Reuters I/B/E/S. Revenue, however, fell short of the $16.2 billion that Wall Street had expected.

In a press release, Caterpillar CEO Doug Oberhelman said the company was experiencing a “slowing” in China and Brazil as those countries “took steps in 2011 to slow their economies and bring inflation under control.” Strength in the United States was expected to offset that weakness.

Caterpillar to expand excavator capacity in China

PEORIA, Ill., Wed Mar 21, 2012 — Caterpillar Inc. said it will increase hydraulic excavator production by 80 percent in China with a new facility due to be completed in 2016.

Caterpillar said in a statement it will begin production of wheeled excavators at Caterpillar Xuzhou Ltd. beginning in early 2014.

It did not provide any figures.

CXL is the company’s manufacturing flagship in China, Caterpillar said. The company has 17 facilities in China and nine more under construction.

“We are expanding our production capabilities as this market continues to grow,” Gary Stampanato, Caterpillar vice president with responsibility for excavators, said.

Caterpillar produces wheeled excavators in Grenoble, France. It said production there will continue.

Caterpillar to offer $885 million for China’s ERA Mining

PEORIA, Ill. ― Caterpillar Inc. said it will make an offer to buy China’s ERA Mining Machinery Ltd. to strengthen its mining business and ramp up investment in the fast-growing country, in a dual-option deal that could be worth up to $885 million.

Shares in ERA, which makes underground coal mining equipment, rose 21.2 percent to HK$0.8 on Friday.

“Coal consumption in China is growing faster than anywhere else in the world,” Caterpillar Group President Steven Wunning told Reuters in a telephone interview on Friday. Wunning said that China already consumes nearly half of the world’s coal, creating a huge market for underground mining of the resource.

Caterpillar will either pay HK$0.88 cash per share, and/or offer a loan note alternative, which will entitle ERA’s loan note holders to receive a minimum of HK$0.75 and up to HK$1.15 per loan note upon redemption.

The offer values Hong Kong-listed ERA at HK$4.490 billion-$6.885 billion ($577.25 million-$885.15 million), Caterpillar said in a statement.

Caterpillar, the world’s largest heavy machinery manufacturer, said its offer will be made if clearance from China’s Ministry of Commerce and any other related bodies is obtained.

Caterpillar quarterly earnings soar 44 percent, outpacing expectations

PEORIA, Ill. ― Caterpillar Inc far exceeded analyst expectations on Monday, reporting a 44 percent quarterly earnings increase and record revenue, and signaling tempered optimism in its 2012 sales outlook.

The company said it expects full-year 2011 profit and revenue to be at the top end of its previous outlook range due to strong demand. In 2012, the company expects revenue to increase 10 percent to 20 percent above the $58 billion in sales it expects this year.

Caterpillar is one of a slate of industrial companies outpacing analyst expectations during the current earnings reporting season. Like some of its peers, the company is encouraged by the strong results but remaining cautious about the wider economy.

“Although there is a good deal of economic and political uncertainty in the world, we are not seeing it much in our business at this point,” Caterpillar Chief Executive Doug Oberhelman said in a press release. “We believe continued economic recovery, albeit a slow recovery, is the most likely scenario as we move forward.”

The world’s largest heavy machinery manufacturer reported third-quarter net income attributable to common shareholders of $1.14 billion, or $1.71 per share, compared with $792 million, or $1.22 per share, a year earlier.

Analysts on average had expected Caterpillar to earn $1.54 per share in the third quarter.

Sales rose 41 percent to $15.7 billion, which is a record, according to the company.

Caterpillar said full-year 2011 results would come in at the highest end of its previous outlook.

The company now expects annual revenue of $58 billion, including its recent acquisition of Bucyrus. Its previous forecast had been a range of $56 billion and $58 billion.

Profit is now expected to be $6.75 per share for the year, compared with a prior forecast of $6.25 to $6.75. Including the impact of Bucyrus, Caterpillar expects 2011 profit to reach $7.25 per share.

Caterpillar said 2011 will be a record year if the company hits its earnings and revenue expectations.

Caterpillar said it added 4,800 jobs during the quarter, including 2,000 in the United States.

Its shares were up about 5 percent in premarket trading.

Caterpillar sees slowdown in dealer sales growth

BOSTON ― Caterpillar Inc. said growth in dealer sales of its heavy equipment slowed in the three months ended July, particularly in North America, reinforcing concerns about the struggling U.S. economy.

The world’s largest maker of construction equipment said on Thursday that dealer sales ― an indicator of future revenue ― rose 35 percent worldwide over the past three months, a slower rate than the 45 percent growth reported in July.

Caterpillar shares were down 4.7 percent at $83.56 on Thursday morning, exceeding the 4.1 percent drop in the S&P 500 Index. .SPX Over the past year, Caterpillar shares have risen about 26 percent, outpacing the 10 percent climb of the Dow Jones industrial average.

Growth in North America slowed most dramatically ― to 27 percent from 50 percent ― and growth in the Asia-Pacific region dipped to 20 percent from 28 percent. Latin America was the one area to report an acceleration, with sales growth rising 1 point to 52 percent.

The report, which came in a filing with the U.S. Securities and Exchange Commission, marked the third straight decline in the growth rate from the most recent peak of a 66 percent rise in dealer sales for the three months ended in April.

Caterpillar, whose competitors include Japan’s Komatsu Ltd (6301.T) and South Korea’s Doosan Infracore Co. Ltd. warned investors last month that economic growth in the United States and other developed economies had been slower than expected this year, and also warned of signs of sagging demand in China, the world’s fastest-growing major economy.

A report by the American Institute of Architects released on Wednesday also suggested nonresidential construction activity was slowing down in the United States. The slump in building homes and other buildings has contributed to the nation’s persistent high unemployment rate by reducing demand for blue-collar workers in the construction trade.

China approves Caterpillar acquisition of Bucyrus mining equipment firm

PEORIA, Ill. ― Caterpillar Inc , the world’s largest maker of heavy equipment, said China’s regulator had approved its acquisition of U.S. mining equipment firm Bucyrus International, paving the way for the company to complete a deal announced in November.

Caterpillar said on Friday the Ministry of Commerce approval followed the U.S. Justice department’s recent clearance of the transaction.

Caterpillar’s exposure to commodities including metals and coal will only increase when it closes on its acquisition of Bucyrus.

In November, Caterpillar sealed its position as the world’s No. 1 maker of mining equipment with its purchase of Bucyrus International for $7.6 billion, the biggest acquisition in its 85-year history.