Cat back in profit

Caterpillar recovered from its first quarter loss with a net profit of US$ 371 million for the second quarter of the year, although this was down -66% on the figure of US$ 1.11 billion for the second quarter of 2008. Sales for the quarter were down -41% at US$ 7.98 billion, compared to US$ 13.6 billion a year ago.

The sharpest fall in Caterpillar's sales over the three-month period was in the Europe, Africa and Middle East region (EAME), where revenues were US$ 2.22 billion - half what they were a year ago. North American and Latin American sales were down -42% and -41% to US$ 3.18 billion and US$ 867 million respectively. The impact was less in the Asia/Pacific region with a -24% drop in revenues to US$ 1.70 billion.

Sales of equipment were harder hit than Caterpillar's engine business, with a -49% decline to US$ 4.34 billion. Again the EAME region was hardest hit, with a -61% downturn, while North America was down -51%, Latin America -47% and Asia/Pacific -25%.

Commenting on the results, Caterpillar chairman and CEO Jim Owens said, " Our profit this quarter, despite the sharp decline in sales is a tribute to Team Caterpillar's response to this severe global recession and the continued deployment of our economic trough strategy. There is still a great deal of economic uncertainty in the world, but we are seeing signs of stabilisation that we hope will set the foundation for an eventual recovery."

He continued, "Credit markets have improved significantly. Fiscal policy and monetary stimulus have been introduced around the world, and we are seeing signs, particularly in China, that they are beginning to work. In addition, we've seen many ckey commodity prices increase form their lows in the first quarter, and they are holding in a range that is usually positive for investment."