What was the primary driver for the decrease in profit compared to the second quarter of 2001?

The primary driver for the decrease in profit was lower physical sales volume, particularly in larger machines and engines, which also led to related manufacturing inefficiencies. Additionally, a $40 million pretax charge for 'other than temporary' declines in the market value of securities within the Cat Insurance investment portfolio impacted profitability.

What is Caterpillar's outlook for the remainder of 2002?

Caterpillar now expects full-year 2002 sales and revenues to be down slightly from 2001. Full-year profit is projected to be about 15 percent lower than last year, excluding nonrecurring charges recorded in 2001. This outlook reflects a slower-than-anticipated recovery in capital spending.

How is the Financial Products division performing?

The Financial Products division continues to show solid growth. Revenues for the second quarter of 2002 were $419 million, an increase of 3% compared to the second quarter of 2001. This growth was primarily driven by the expansion of the Cat Financial portfolio and increased revenue at Caterpillar Insurance Holdings.

What is Caterpillar doing to address environmental regulations for its engines?

Caterpillar is making progress on its ACERT technology, which will enable its engines to meet EPA emission levels. The company plans to start shipping the first clean-diesel engines with ACERT technology in early 2003. In the interim, Caterpillar will offer an EPA-certified low-emissions version of its current heavy-duty engines starting October 1, 2002, while continuing to address potential non-conformance penalties.

CAT 10-Q Quarterly Report Q2 FY2002 — Revenue, Net Income, EPS

Summary

Caterpillar Inc. reported sales and revenues of $5.29 billion and a profit of $200 million ($0.58 per share) for the second quarter of 2002. While this represents a slight decrease compared to the same period in the prior year, the company highlighted its ability to remain solidly profitable despite challenging market conditions and an anticipated, but delayed, recovery in capital spending. The Financial Products division continued to show solid growth, with revenues up 3% year-over-year. Looking ahead, Caterpillar anticipates full-year 2002 sales and revenues to be down slightly from 2001, with profit expected to be approximately 15% lower than the previous year, excluding nonrecurring charges. The company is progressing with the development of its ACERT technology for cleaner engines and continues to focus on quality improvements and cost controls through initiatives like 6 Sigma to navigate the uncertain economic environment and position itself for future recovery.

Key Highlights

1Second quarter 2002 sales and revenues were $5.29 billion, with profit at $200 million or $0.58 per share, a decrease from Q2 2001's $5.49 billion in sales and $0.79 per share profit.
2Despite lower physical sales volume, particularly in larger machines and engines, the company maintained profitability due to diversified product offerings and services.
3The Financial Products division reported revenue growth of 3% to $419 million in the second quarter, driven by portfolio expansion at Cat Financial and Cat Insurance.
4A $40 million pretax charge was recognized due to 'other than temporary' declines in the market value of securities within the Cat Insurance investment portfolio.
5The company now expects full-year 2002 sales and revenues to be slightly down from 2001, with profit projected to be about 15% lower, excluding 2001 nonrecurring charges.
6Caterpillar is on track to ship its first clean-diesel engines with ACERT technology in early 2003.
7Worldwide dealer new machine inventories were lower compared to the previous year, indicating better inventory management and potential for increased shipments as retail sales recover.

CATERPILLAR INC Quarterly Report for Q2 Ended Jun 30, 2002

Summary

Key Highlights

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