10-QPeriod: Q1 FY2012

CATERPILLAR INC Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 7, 2012For Securities:CAT

Summary

Caterpillar Inc. (CAT) reported a strong first quarter for 2012, with sales and revenues increasing by 23% to $15.981 billion compared to the same period in 2011. This growth was driven by higher sales volume across most segments and regions, supported by strategic acquisitions like Bucyrus and MWM. The company achieved a record quarterly profit per share of $2.37, a 29% increase year-over-year, reflecting effective cost management and increased production to meet growing global demand, particularly for mining and replacement products. While overall demand remains robust, with particular strength in mining products and the U.S. market for replacement parts, the company noted slowing demand in China and Brazil. Despite higher manufacturing and operating expenses related to production increases and capacity expansion, Caterpillar successfully leveraged its sales growth to improve operating profit margins. The Financial Products segment also showed significant improvement, contributing to the overall positive financial performance.

Financial Highlights

46 data points
Beta

Revenue

$15.98B

25.3% Gross Margin

Net Income

$1.59B

9.9% Net Margin

EPS (Diluted)

$2.37

Total Assets

$83.91B

Free Cash Flow

$315.00M

Financial Statements
Beta
Revenue$15.98B
Cost of Revenue$11.24B
Gross Profit$4.05B
R&D Expenses$587.00M
SG&A Expenses$1.34B
Operating Expenses$13.66B
Operating Income$2.32B
Net Income$1.59B
EPS (Basic)$2.44
EPS (Diluted)$2.37
Shares Outstanding (Basic)650.00M
Shares Outstanding (Diluted)670.20M

Key Highlights

  • 1Total sales and revenues grew by 23% to $15.981 billion in Q1 2012 compared to Q1 2011.
  • 2Profit per share reached a record $2.37, a 29% increase year-over-year, reflecting strong execution and cost control.
  • 3Acquisitions of Bucyrus and MWM contributed significantly to revenue growth, adding $1.001 billion and $143 million respectively.
  • 4Operating profit increased by 27% to $2.323 billion, driven by higher sales volume and price realization, despite increased manufacturing and operating expenses.
  • 5Resource Industries segment sales surged by 73% due to the Bucyrus acquisition and strong demand in mining.
  • 6Financial Products segment profit increased by 51% to $205 million, driven by higher average earning assets and a decrease in provision expense.
  • 7Inventories increased by $2.0 billion (27%) to $16.5 billion, primarily to support anticipated higher sales.

Frequently Asked Questions

The primary driver of Caterpillar's revenue growth in Q1 2012 was a significant increase in sales volume across most segments and geographic regions, augmented by the impact of recent acquisitions, notably Bucyrus and MWM. Higher prices also contributed positively to revenue.

Despite higher manufacturing costs related to increased production volume and capacity expansion programs, Caterpillar managed to control costs as a percentage of sales. This focus on cost control, combined with strong sales volume and price realization, led to an improvement in operating profit margin.

The Q1 2012 results indicate a positive outlook with strong global demand, particularly for mining products and replacement parts in the U.S. While there are noted slowdowns in China and Brazil, the company's broad geographic reach and strategic focus on increasing production and capacity position it well to capitalize on improving economic conditions and customer demand.

The Financial Products segment showed strong improvement, with revenues increasing by 4% and profit rising by 51% year-over-year. This was driven by higher average earning assets and a significant decrease in the provision for credit losses, indicating improved asset quality and profitability for Cat Financial.