Caterpillar Inc. Announces Third-Quarter 2012 Results
October 22, 2012
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FOR IMMEDIATE RELEASE
Caterpillar Reports Best Third-Quarter Sales and Profit in History
PEORIA, Ill. — Caterpillar Inc. (NYSE: CAT) today announced third-quarter 2012 sales and revenues of $16.445 billion, a 5-percent increase from third-quarter 2011 sales and revenues of $15.716 billion. Profit per share for the third quarter of 2012 was $2.54, up 49 percent from $1.71 per share in the third quarter of 2011. Third-quarter 2012 profit per share includes a pre-tax gain of $273 million from the sale of a majority interest in Caterpillar’s third party logistics business, which had previously been announced.
“Last quarter and then again a month ago at MINExpo, we discussed economic and geopolitical headwinds facing the world, and we are certainly continuing to see the impact of those uncertainties in our business,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman. “Even so, we had a record third quarter, and our entire organization is focused on finishing 2012 as the best year for sales and profit in our history,” Oberhelman added. “Despite the turbulence in the global economy, we continue to track toward our goals on cost control, margin improvement, product quality, safety and better product availability for our customers.”
We now expect 2012 sales and revenues to be about $66 billion and profit in a range of $9.00 to $9.25 per share. The previous outlook for sales and revenues was a range of $68 to $70 billion with profit of about $9.60 per share at the middle of the sales and revenues outlook range.
The decline in the sales and revenues outlook reflects global economic conditions that are weaker than we had previously expected. In addition, Cat dealers have lowered order rates well below end-user demand to reduce their inventories. Production across much of the company has been lowered, resulting in temporary shutdowns and layoffs. Lower production will continue until inventories and dealer order rates move back in line with dealer deliveries to end users. The reduction in the profit outlook is in line with the lower sales and revenues outlook, partially offset by the gain on the sale of a majority interest in our third party logistics business.
“As we've moved through the year, we've seen continued economic weakening and uncertainty. It's definitely impacting our business with dealers intending to lower inventories and mining customers delaying some projects and reducing orders,” Oberhelman said. “We're focused on being very nimble and taking actions to respond to the current environment while at the same time keeping our 2015 goals and expectations in mind. It requires a pragmatic and steady approach as we balance our actions in the short term with what we need to do to be prepared for better growth when the world economy improves,” Oberhelman added.
Preliminary 2013 Sales and Revenues Outlook
From an economic standpoint, we are expecting slightly better world growth in 2013 with modest improvement in the United States, China and most of the developing world, but continuing difficulty in Europe. Based on our economic forecast, our preliminary outlook for 2013 is for sales and revenues to be about the same as 2012 in a range of up 5 percent to down 5 percent.
“We are taking a pragmatic view of 2013—we're not expecting rapid growth, and we're not predicting a global recession. At this point, we expect 2013 sales will be similar overall to 2012, but with a slightly weaker first half and a slightly better second half. While machine deliveries to end users have continued to hold up, our sales will probably remain relatively weak early in 2013 as dealers are likely to continue reducing inventories. When expected dealer inventory reductions level off, and easing actions by central banks and governments around the world begin to improve economic growth, we expect our business will begin to improve. While there's reason for optimism, and we're not expecting a global recession in 2013, we are prepared and stand ready to take action no matter what happens to the global economy,” Oberhelman added.
Caterpillar worldwide full-time employment was 129,113 at the end of the third quarter of 2012 compared with 121,513 at the end of the third quarter of 2011, an increase of 7,600 full-time employees. The flexible workforce decreased by 2,954 for a net increase in the global workforce of 4,646.
The increase was a result of growth and acquisitions, partially offset by divestitures. Acquisitions, primarily ERA Mining Machinery Limited (Siwei) and Motoren-Werke Mannheim Holding GmbH (MWM), added 5,977 people to the global workforce. Divestitures related to the sale of Caterpillar’s third party logistics business and a portion of the Bucyrus distribution business decreased the global workforce by 7,353.