CATERPILLAR INC Quarterly Report for Q2 Ended Jun 30, 2008

Summary

Caterpillar Inc. reported strong financial results for the second quarter ended June 30, 2008, driven by robust growth in emerging markets and key industries like energy and mining. Total sales and revenues increased by 20% year-over-year to $13.624 billion, with significant contributions from both the Machinery and Engines segments. Profit per share saw a substantial increase of 40% to $1.74. The company benefited from improved price realization, higher sales volume, and favorable currency movements, particularly from a stronger Euro. Despite rising material and freight costs, Caterpillar effectively managed operating expenses, with SG&A and R&D expenses decreasing as a percentage of sales. The company raised its full-year outlook, projecting sales and revenues of approximately $50 billion and profit per share of about $6.00, reflecting confidence in continued demand, especially from developing economies and sectors like mining and energy. While acknowledging economic headwinds in North America and Europe, Caterpillar's diversified business model and strategic capacity expansions position it well for sustained growth.

Key Highlights

• 1Total sales and revenues increased 20% to $13.624 billion for Q2 2008 compared to Q2 2007.
• 2Profit per share rose 40% to $1.74 for Q2 2008 compared to Q2 2007.
• 3Machinery sales grew 17% and Engines sales increased 28% in Q2 2008 compared to Q2 2007.
• 4Sales outside North America represented 60% of total sales and revenues in Q2 2008, up from 55% a year ago.
• 5The company raised its full-year 2008 outlook for sales and revenues to approximately $50 billion and profit per share to about $6.00.
• 6Inventories increased, indicating strong demand and potential capacity constraints.
• 7Financial Products revenues increased 11% in Q2 2008, driven by growth in average earning assets.

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