What is the primary reason for the decrease in profit compared to the prior year's first quarter?

The primary reasons for the decrease in profit were lower physical sales volume of larger machines and engines, coupled with related manufacturing inefficiencies.

What is Caterpillar's outlook for the full year 2002?

Caterpillar expects full-year 2002 sales and revenues to be approximately flat compared to 2001. Full-year profit is projected to be up slightly, excluding nonrecurring charges from 2001. This projection is based on anticipated improvements in global business conditions in the second half of the year.

How is the Financial Products division performing?

The Financial Products Division demonstrated strong performance, with revenues of $402 million for the quarter, slightly down from the prior year. However, its profit before tax increased by 8% to $90 million, driven by a better spread on its portfolio and higher underwriting income at Cat Insurance, partially offset by a higher provision for credit losses.

What is the company's stance on the adoption of SFAS 142 regarding goodwill?

Caterpillar adopted SFAS 142 on January 1, 2002, which requires goodwill and indefinite-lived intangible assets to be tested for impairment rather than amortized. The company stated that adopting these non-amortization provisions is expected to result in a pretax increase in earnings of approximately $80 million per year, and the transitional impairment tests did not result in an impairment loss.

CAT 10-Q Quarterly Report Q1 FY2002 — Revenue, Net Income, EPS

Summary

Caterpillar Inc. reported first-quarter 2002 sales and revenues of $4.41 billion and a profit of $80 million, or $0.23 per share. This represents a decrease from the $4.81 billion in sales and $162 million in profit ($0.47 per share) reported in the first quarter of 2001. The decline in profitability was primarily attributed to lower sales volumes of larger machines and engines, coupled with manufacturing inefficiencies. Despite the year-over-year decline, management expressed confidence in achieving full-year 2002 sales and revenues similar to the prior year, with a slight increase in profit. This outlook is supported by expectations of improving global business conditions in the second half of the year, cost-reduction efforts, and the company's diversified product and service offerings. The company is also managing its cost structure through efficiency initiatives like 6 Sigma projects.

Key Highlights

1Total sales and revenues for Q1 2002 were $4.41 billion, a decrease from $4.81 billion in Q1 2001.
2Profit for Q1 2002 was $80 million ($0.23 per share), down from $162 million ($0.47 per share) in Q1 2001.
3The decline in profit was primarily due to lower sales volume of large machinery and engines and associated manufacturing inefficiencies.
4Sales in Asia/Pacific and Latin America saw increases, partially offsetting declines in North America and Europe, Africa, and the Middle East.
5Caterpillar Financial Products Division continued its strong performance, with revenues of $402 million and profit before tax of $90 million.
6The company expects full-year 2002 sales and revenues to be about flat with 2001 and profit to be up slightly.
7Worldwide dealer machine inventories were lower at the end of Q1 2002 compared to the previous year.

CATERPILLAR INC Quarterly Report for Q1 Ended Mar 31, 2002

Summary

Key Highlights

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