Caterpillar revenues edge up
By Chris Sleight24 October 2014
Caterpillar’s revenues for the third quarter of 2014 edged up +1% on the same period last year, to US$ 13.5 billion. The company’s net profit was up +8% to US$ 1.02 billion.
Caterpillar chairman and CEO Doug Oberhelman said, “We’re pleased with the third-quarter profit improvement considering world economic growth remains slower than we’d like. We’ve continued to focus on what we can control — cost management and operational execution.”
The company said it expects 2014 revenues to be about US$ 55 billion, the middle of the previous outlook range of US$ 54 to US$ 56 billion, but added that the profit outlook was improving.
“In January we provided our first profit outlook for 2014 at US$ 5.85 per share excluding restructuring costs — our current outlook excluding restructuring costs is US $6.50 per share, a substantial improvement. The fact that we continue to raise our profit per share outlook on relatively flat sales is a testament to our diverse portfolio of businesses, disciplined cost control and operational execution,” said Mr Oberhelman.
Third quarter revenues at Caterpillar’s Construction Industries business were down -2% to US$ 4.47 billion. Although it saw growth in North America and the Europe, Africa & Middle East region, this was offset by declines in Latin America and Asia-Pacific.
More significant for Caterpillar was the -19% decline in sales by its Resource Industries business, which serves the mining industry. However, the company’s Energy & Transportation business saw a +13% rise in revenues.
Looking ahead, Caterpillar was bullish about its prospects for 2015. A company statement said, “From an economic perspective, we believe there is a reasonable likelihood that world economic growth could improve in 2015. In developed countries, growth-oriented monetary policies should support continued modest economic improvement. In addition, we believe there is potential for increased investment in infrastructure in countries such as the US, India and Turkey.”
However, it added that there were still risks such as conflict and unrest which could damage its business. It also highlighted slowing growth in China and other factors which meant Caterpillar was expecting revenues in 2015 to be similar to 2014.