Summary
Caterpillar Inc. reported a 3% decrease in total sales and revenues for the second quarter of 2014, reaching $14.15 billion, down from $14.62 billion in the same period of 2013. Despite the revenue decline, profit per share increased by 8% to $1.57, and net profit rose 4% to $999 million. This performance was driven by a combination of factors, including lower sales volume, particularly in the Resource Industries segment due to weak mining demand, which was partially offset by favorable price realization and changes in dealer inventories. Restructuring costs were a significant factor, impacting profit per share by $0.12. The company also announced a substantial $2.5 billion common stock repurchase program, signaling confidence in its financial position and a commitment to returning capital to shareholders.
Financial Highlights
48 data points| Revenue | $14.15B |
| Cost of Revenue | $10.20B |
| Gross Profit | $3.19B |
| R&D Expenses | $516.00M |
| SG&A Expenses | $1.44B |
| Operating Expenses | $12.68B |
| Operating Income | $1.48B |
| Net Income | $999.00M |
| EPS (Basic) | $1.60 |
| EPS (Diluted) | $1.57 |
| Shares Outstanding (Basic) | 626.30M |
| Shares Outstanding (Diluted) | 638.30M |
Key Highlights
- 1Total sales and revenues decreased by 3% to $14.15 billion for the quarter, primarily due to lower sales volume in the Resource Industries segment affected by reduced mining demand.
- 2Profit per share increased by 8% to $1.57, and net profit rose 4% to $999 million, indicating improved profitability despite lower revenues.
- 3Restructuring costs of $114 million were incurred, primarily related to workforce reductions at the Gosselies, Belgium facility, impacting diluted earnings per share by $0.12.
- 4Machinery, Energy & Transportation (ME&T) operating cash flow decreased to $2.064 billion from $3.049 billion year-over-year.
- 5The ME&T debt-to-capital ratio increased to 32.5% from 29.7% at the end of 2013, mainly due to debt issuances.
- 6Caterpillar announced plans to repurchase $2.5 billion of its common stock in the third quarter of 2014, funded by a new $10 billion repurchase authorization.
- 7The Financial Products segment showed a 3% increase in revenues to $834 million and a 5% increase in profit to $244 million, driven by higher average earning assets.