Caterpillar posts record Q3 earnings

But the company is cautious about the global economy.

By Bruce Kennedy Oct 22, 2012 12:08PM

Caterpillar (CAT), a global leader in construction and mining equipment, announced record third-quarter earnings Monday. But company warned that its 2013 revenue may be lower as the world economy slows.


Caterpillar's sales rose to $16.4 billion, a 5% increase over the same time period last year. Profit per share was $2.54, well above the expected $2.22.

Chairman and CEO Doug Oberhelman noted that "economic and geopolitical headwinds facing the world" continue to create an uncertain financial environment and are sure to affect business. However, he said, "we had a record third quarter, and our entire organization is focused on finishing 2012 as the best year for sales and profit in our history. Despite the turbulence in the global economy, we continue to track toward our goals on cost control, margin improvement, product quality, safety and better product availability for our customers."


That said, the company expects its 2012 sales and revenues to be a weaker-than-expected $66 billion -- down from a previous estimate in the $68 billion to $70 billion range. Caterpillar also notes its dealers have lowered order rates to reduce their inventories and that lower company-wide production will result in temporary shutdowns and layoffs.


Image, Construction copyright Photodisc Green, Getty ImagesCaterpillar's preliminary forecast for 2013, meanwhile, is for sales and revenue to hover in a range of 5% above to 5% below its 2012 numbers.


"We are taking a pragmatic view of 2013," Oberhelman said. "We're not expecting rapid growth, and we're not predicting a global recession."


The company is looking for a slow start to next year but expects about 2% economic growth in its U.S. market as the housing crisis eases and construction activity for both residential and nonresidential structures picks up.


At the same time, Caterpillar expects marginal growth at best from its European markets as the debt crisis there deepens. It warns "the eurozone is the most significant risk to our 2013 economic outlook."


Caterpillar's sales in China also remained weak in the third quarter, and below 2011 levels. And while the Chinese economy cools, the company is still optimistic about long-term growth there.

"Our plans for the remainder of 2012 reflect a continued orderly ramp-down of production that considers our entire supply chain in China," Caterpillar said. "Given the current low rate of sales and the production ramp down, it will likely take the rest of 2012 and continuing into 2013 to reduce inventory to levels more in line with sales."


The company also expects growth in Brazil, Africa and Latin America to increase as the economic landscape improves, the demand for natural resources continues and construction activity revives.

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Tags: CAT
Oct 22, 2012 1:56PM
does it?? does it really? what gave it away??? the horrible unemployment numbers??? the convenient leaving out of California on the last jobs report?? the increase in jobless claims to the tune of 388,000 and of course it's more than that but the regime tries to cover up the true numbers anyway, so wonder what finally told Caterpillar that the economy is slowing?? hmmmmm
Oct 22, 2012 2:55PM
Cat is building a new plant in Athens, GA right now that will employee hundreds of workers.  My business is a supplier to Cat.  They are a top notch company and build quality products.  If Cat is leaving your city, it is probably because you have an unfriendly business climate in your state and your workers are probably unionized.  Cat is growing and kicking butt in the southeast.  And besides earth moving equipment, they produce giant generators to power third world countries.  Cat is one of the premier companies in the states.  But wait, liberals want companies to fail so they can buy everything made in China from Wal-Mart.
Oct 22, 2012 2:16PM
Caterpillar in aurora,il is moving the excavator line to mexico.  That will be 500 working mens jobs. They don't care about familys  all they care about is how much more money they can make. When are we as Americans going to wake up and make a stand up to corp. America and demand that if they start a company in America and move it out of America then they cant sale it in America or have any American name on it. 
Oct 22, 2012 3:32PM
Hmmmm, Illinois. Isn't that where our current President is from?
Land of very strong unions, high taxes, and an ungodly amount of regulations to hinder business at every turn?
Yeah, it's that greedy Corporation's fault they are moving.
Liberals and die hard union advocates, can you detect sarcasm when you see it?
Oct 22, 2012 2:57PM
Record profits and they're predicting layoffs?  Hmm, something doesn't sound right...
Oct 22, 2012 2:33PM
So are these record profits a result of selling more equipment and services or simply a result of raising  their selling prices, cost cutting initiatives, closing facilities, laying off people and accounting "loopholes" ?  It seems odd to me that considering CAT generates a good portion of their profits in Europe and we know that in general Europe is in a recession that how can CAT be generating record profits?    It always concerns me when companies report their sales performance but are reluctant to explain how they got the results. 
Oct 22, 2012 3:26PM

But don't worry about it!....Like Nobozo says, "The middle class is doing fine!"...




GO ROMNEY 2012!!!


Oct 22, 2012 3:32PM
Why are so many mexicans jumping the border when all the jobs are heading to mexico?
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