10-QPeriod: Q2 FY2000

CATERPILLAR INC Quarterly Report for Q2 Ended Jun 30, 2000

Filed August 11, 2000For Securities:CAT

Summary

Caterpillar Inc. reported a strong second quarter for 2000, with sales and revenues increasing by 5% to $5.36 billion, driven primarily by higher physical sales volume across all global regions. Profit also saw a significant uplift of 11% to $315 million, resulting in a 15% increase in profit per share to $0.90. This performance was attributed to improved manufacturing efficiencies and the higher sales volume. Despite concerns about rising interest rates impacting the U.S. construction equipment and truck engine markets, the company maintained its full-year outlook, expecting slight sales growth and moderate profit increases. The company's Financial Products segment also demonstrated robust growth, with revenues up 10%. Caterpillar continued its commitment to shareholder returns by increasing its quarterly dividend by 5% and repurchasing approximately 3.06 million shares during the quarter as part of a larger share reduction program.

Key Highlights

  • 1Total sales and revenues increased 5% to $5.36 billion in Q2 2000 compared to Q2 1999.
  • 2Profit increased 11% to $315 million, with profit per share rising 15% to $0.90.
  • 3Financial Products segment revenues grew 10%.
  • 4Sales increased in all global regions, driven by higher physical volume.
  • 5Caterpillar increased its quarterly dividend by 5%, marking the seventh consecutive annual increase.
  • 6Approximately 3.06 million shares were repurchased under the ongoing share reduction program.
  • 7The company maintained its full-year outlook for slight sales growth and moderate profit increase, despite concerns over U.S. interest rates.

Frequently Asked Questions

The primary drivers for the 5% increase in sales and revenues to $5.36 billion were higher physical sales volumes across all regions. Profit growth of 11% to $315 million was mainly due to improved manufacturing efficiencies and the increased sales volume.

The Financial Products segment showed strong performance, with revenues increasing by 10% to $359 million in the second quarter of 2000, indicating continued growth in Caterpillar's financial services portfolio.

Caterpillar anticipates full-year sales to be slightly higher than 1999 and profit to increase moderately. While the company is concerned about the impact of rising interest rates on the U.S. market, its global diversification and broad product line are expected to support these forecasts.

Caterpillar demonstrated its commitment to shareholders by increasing its quarterly dividend by 5%, the seventh consecutive annual increase. Additionally, the company repurchased 3.06 million shares in the second quarter as part of its ongoing program to reduce outstanding shares.