Summary
Caterpillar Inc. reported a decrease in sales and revenues for the third quarter of 1999, amounting to $4.72 billion, a 9% drop from the same period in the previous year. This decline was primarily attributed to an 8% decrease in physical sales volume, although this was partially offset by a 10% increase in revenues from its Financial Products segment. Profit for the quarter also saw a significant reduction, falling to $219 million, or $0.61 per share, down 35% from $336 million in the prior year's third quarter. The company cited lower sales volume, reduced price realization, and an unfavorable product sales mix as key drivers for the profit decrease. Management expects full-year 1999 sales and revenues to be approximately 5% lower than 1998, with profit per share around $3.00. However, a positive outlook is projected for 2000, anticipating growth in both sales and profits driven by better worldwide economic conditions, higher commodity prices, and reduced dealer inventory.
Key Highlights
- 1Third-quarter sales and revenues declined by 9% to $4.72 billion due to an 8% decrease in physical sales volume.
- 2Profit for the quarter dropped by 35% to $219 million ($0.61 per share) compared to $336 million in the prior year.
- 3Financial Products revenues saw a robust 10% increase, partially mitigating the overall sales decline.
- 4Machinery and Engines SG&A and R&D expenses were reduced by 8% and 7% respectively.
- 5Company anticipates a full-year 1999 sales and revenue decline of about 5% below 1998 levels.
- 6A positive outlook for 2000 forecasts increases in both sales and profits.
- 7Caterpillar repurchased 1.2 million shares during the quarter as part of a program to reduce outstanding shares.