Summary
Caterpillar Inc. reported its third-quarter 2000 results, showing a slight increase in sales and revenues to $4.78 billion, up 1% from the prior year, driven by higher physical volume and a significant 12% rise in Financial Products revenues. However, profit per share saw a modest 2% increase to $0.62, while net profit dipped slightly by 1% to $216 million. This was attributed to unfavorable currency movements and increased selling, general, and administrative (SG&A) and research and development (R&D) costs, which were partially offset by favorable tax adjustments and improved pricing. The company reiterated its full-year 2000 outlook, expecting sales and revenues to be slightly higher than 1999 and profit to increase moderately. The outlook for 2001 also anticipates a slight increase in sales and revenues. Despite a challenging quarter marked by a strong dollar and soft markets, management emphasized efforts to reduce costs and highlighted the company's geographic and product diversity as key strengths, particularly noting strong demand for electric power and energy development applications.
Key Highlights
- 1Third-quarter sales and revenues reached $4.78 billion, a 1% increase year-over-year, driven by higher physical volume and a 12% rise in Financial Products revenues.
- 2Profit per share for the quarter was $0.62, a 2% increase, while net profit was $216 million, down 1% from the prior year.
- 3Unfavorable currency effects and increased SG&A/R&D costs impacted profitability, but were partially offset by tax adjustments and improved price realization.
- 4Sales in the United States accounted for 49% of worldwide sales, up from 47% in the prior year.
- 5Caterpillar repurchased 2 million shares during the quarter, contributing to a reduction in outstanding shares.
- 6The company maintained its full-year 2000 outlook for slightly higher sales and moderate profit increase.
- 7Machinery sales increased by 4% to $2.78 billion, primarily due to a slower rate of dealer inventory reduction and improved sales in North America, Latin America, and EAME.