April 29, 2021
Cat Financial reported first-quarter 2021 revenues of $639 million, a decrease of $56 million, or 8%, compared with the first quarter of 2020. First-quarter 2021 profit was $140 million, a $50 million, or 56%, increase from the first quarter of 2020.
The decrease in revenues was primarily due to a $40 million unfavorable impact from lower average financing rates and a $19 million unfavorable impact from lower average earning assets.
First-quarter 2021 profit before income taxes was $196 million, a $69 million, or 54%, increase from the first quarter of 2020. The increase was primarily due to a $71 million decrease in provision for credit losses, partially offset by a $13 million increase in general, operating and administrative expenses, primarily due to higher incentive compensation. The impact of lower average financing rates was offset by lower interest expense.
The provision for income taxes reflected an estimated annual tax rate of 27% in the first quarter of 2021, compared with 26% in the first quarter of 2020.
During the first quarter of 2021, retail new business volume was $2.81 billion, an increase of $497 million, or 21%, from the first quarter of 2020. The increase was driven by higher volume in Asia/Pacific, North America, Mining and EAME, partially offset by a decrease in Latin America.
At the end of the first quarter of 2021, past dues were 2.90%, compared with 4.13% at the end of the first quarter of 2020. Past dues decreased across all portfolio segments as global markets generally improved. Write-offs, net of recoveries, were $24 million for the first quarter of 2021, compared with $30 million for the first quarter of 2020. As of March 31, 2021, the allowance for credit losses totaled $441 million, or 1.64% of finance receivables, compared with $479 million, or 1.77% of finance receivables at December 31, 2020.
"Our business delivered strong results in the first quarter, reflecting an improved economy and the Cat Financial team’s focus on executing the strategy," said Dave Walton, president of Cat Financial and vice president with responsibility for the Financial Products Division of Caterpillar Inc. "Cat Financial remains committed to serve Caterpillar customers and dealers worldwide through financial services solutions."
For 40 years, Cat Financial, a wholly owned subsidiary of Caterpillar, has provided financial service excellence to customers. The company offers a wide range of financing solutions to customers and Cat® dealers for machines, engines, Solar® gas turbines, marine vessels and various operational needs. Cat Financial has offices and subsidiaries located throughout North and South America, Asia, Australia, Europe, Africa and the Middle East, with its headquarters in Nashville, Tennessee.
Caterpillar media contact: Kate Kenny, +1 309-361-9333 or Kenny_Kate@cat.com
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