Summary
Caterpillar Inc. (CAT) reported its second-quarter 2009 results on July 30, 2009, showing a significant year-over-year decline in sales and revenue, down 41% to $7.975 billion. This was primarily driven by a substantial drop in machinery and engine sales volumes amidst a severe global recession. Despite the sharp revenue decline, the company managed to report a profit of $0.60 per share ($0.72 excluding redundancy costs), reflecting cost-saving measures including lower selling, general, and administrative expenses, and research and development expenses. The company's "economic trough strategy" and cost-control initiatives helped mitigate the impact of the downturn. Caterpillar highlighted signs of stabilization in credit markets and improving economic indicators in some regions, particularly China. However, global economic uncertainty remains a concern, with projected further declines in output before a potential recovery. Caterpillar has taken steps to reduce inventory by over $1.6 billion year-to-date and maintained a strong liquidity position, with approximately $3 billion in excess cash reserves.
Financial Highlights
44 data points| Revenue | $7.97B |
| Cost of Revenue | $5.75B |
| Gross Profit | $1.50B |
| R&D Expenses | $351.00M |
| SG&A Expenses | $914.00M |
| Operating Expenses | $7.63B |
| Operating Income | $347.00M |
| Net Income | $371.00M |
| EPS (Basic) | $0.61 |
| EPS (Diluted) | $0.60 |
| Shares Outstanding (Basic) | 611.80M |
| Shares Outstanding (Diluted) | 619.80M |
Key Highlights
- 1Sales and revenues decreased by 41% to $7.975 billion in Q2 2009 compared to $13.624 billion in Q2 2008.
- 2Diluted earnings per share (EPS) were $0.60 for Q2 2009, down from $1.74 in Q2 2008.
- 3Excluding redundancy costs of $85 million ($0.12 per share), adjusted EPS was $0.72.
- 4The company is focused on inventory reduction, having reduced it by over $1.6 billion in the first half of the year.
- 5Operating profit for the quarter was $347 million, a significant decrease from $1.525 billion in the prior year's quarter, impacted by lower sales volume and redundancy costs.
- 6Financial Products revenue declined by 13% to $721 million, influenced by lower interest rates and a decrease in average earning assets.
- 7Caterpillar updated its 2009 outlook, tightening the sales and revenues range and improving profit expectations, forecasting diluted EPS between $0.40 and $1.50 (including redundancy costs).