Caterpillar profits double as developing regions fuel growth
By Murray Pollok21 October 2010
Caterpillar reported an almost doubling of profits to US$792 million for the third quarter of 2010 on revenues that were up 53% to $11,1 billion.
The increase was driven by sales to Latin America, which almost doubled to $1,76 billion, as well as big increases in North America (up 55% to $4.3 billion) and Asia Pacific (up 51% to $2.25 billion). Sales to Europe, the Middle East and Africa rose by 31% to $2.6 billion.
Overall, machinery sales were up 84% to $7,2 billion, engine sales rose by 21% to $3,2 billion and financial products decreased by 5% to $682 million.
Cat has increased its sales outlook for the year from the previously announced $39 to $42 billion range up to $41-$42 billion, and said that it expected 2011 sales to approach $50 billion, again helped by growth in developing economies.
Caterpillar's chief executive officer, Doug Oberhelman, said the results reflected Cat's efforts to ramp up production and manage costs; "Continuing economic growth in the developing world has been key to improving sales. In addition, sales in developed countries have improved substantially after deep declines in 2009.
"While demand has increased, dealer new machine inventories and rental fleets have remained relatively flat, and the age of rental fleets hasn't improved, and that should be positive for us as we move forward".
Mr Oberhelman said Cat expected positive economic growth in the US, although the recovery "is weaker than we've seen historically, particularly given the depth of the 2009 recession. To drive economic growth, we encourage government policy makers to advance pro-business initiatives and a growth agenda."
He added that government should avoid policy decisions "that may create trade tensions between the United States and other key trading partners and avoid tax policy that puts US multinationals, like Caterpillar, at a competitive disadvantage compared with non-US competitors".
So far in 2010 Caterpillar has increased its global workforce by 15000, including 6000 full-time employees.