Summary
Caterpillar Inc. reported strong sales growth in the second quarter of 2007, reaching a record $11.356 billion, a 7% increase year-over-year. This growth was primarily driven by robust international demand, particularly in EAME and Asia/Pacific, which offset a planned reduction in North American dealer inventories and a significant decline in on-highway truck engine sales. Despite the higher revenues, profit per share saw a decrease to $1.24 from $1.52 in the prior year's quarter, largely due to higher core operating costs, including increased manufacturing costs, material costs, and transitional costs associated with the Cat Production System implementation. The company is maintaining its full-year profit per share outlook, anticipating approximately $44 billion in sales and revenues for 2007.
Key Highlights
- 1Record quarterly sales and revenues of $11.356 billion, up 7% year-over-year.
- 2Strong international sales growth, especially in EAME and Asia/Pacific, compensated for planned North American inventory reductions and a decline in on-highway truck engine sales.
- 3Profit per share decreased to $1.24 from $1.52, impacted by higher operating and manufacturing costs, material costs, and Cat Production System implementation expenses.
- 4Engines sales saw mixed performance, with significant growth in electric power, petroleum, and marine applications, but a substantial decline in on-highway truck engines.
- 5Financial Products segment revenues increased by 14%, driven by growth in average earning assets and higher interest rates.
- 6The company maintained its full-year sales and revenue outlook of approximately $44 billion and its profit per share outlook of $5.30 to $5.80.
- 7Caterpillar is actively managing its cost structure and focusing on operational efficiencies through the Cat Production System and Six Sigma discipline.