Caterpillar has record year despite slow Q4
By Chris Sleight28 January 2013
Caterpillar has reported record revenues and profits for 2012. Revenues were up +10% on last year to US$ 65.9 billion, while net profits were up +15% to US$ 5.68 billion.
This was despite a -7% drop in revenues in the fourth quarter, which the company attributed to dealers lowering their inventories. Profits were also hit by a US$ 580 million charge related to false accounting at Chinese Subsidiary Siwei, prior to its acquisition by Caterpillar. In terms of net profits, this was equivalent to US$ 0.87 per share. However, the company still achieved a profit per share of US$ 8.48 in 2012, compared to US$ 7.40 per share the previous year.
Commenting on the results, Caterpillar chairman and CEO Doug Oberhelman said,” I’m extremely pleased with our performance on reducing inventory by US$ 2 billion in the fourth quarter. As the world economy began to soften mid-year we increased our focus on reducing inventory.” He continued, “Reduced production levels are likely to continue at least through the first quarter of 2013 until inventories and dealer order rates move back in line with end-user demand.”
Sales of equipment from the company’s Construction Industries division in the fourth quarter of the year totalled US$ 4.03 billion, a -25% decline on Q4, 2011. The biggest fall was seen in Asia-Pacific, where revenues were down -32%.
Commenting on its Construction Industries business, Caterpillar said in a statement, “Sales decreased in all geographic regions of the world, driven by dealers reducing new machine inventory levels in the fourth quarter of 2012, compared with dealers increasing inventory levels in the fourth quarter of 2011.”
Operating profit for the segment was just US$ 26 million in the fourth quarter of 2012, compared to US$ 534 million for the same period in 2011.
Caterpillar said it expects revenues for 2013 to come in between US$ 60 billion and US$ 68 billion. Profit per share is also expected to be similar to 2012’s performance at US$ 7.00 to US$ 9.00 per share.