Caterpillar reports increased sales but drop in profits

Caterpillar reported record third quarter sales of US$ 12.9 billion, up +13% on the US$ 11.4 billion recorded in the same period in 2007. Despite increased sales, profits after tax fell -6% from US$ 927 million in the third quarter of 2007 to US$ 868 million in 2008.

Machinery sales in the third quarter increased +13% to US$ 8 billion from US$ 7.1 billion in the corresponding period in 2007, while engine sales increased +16% to US$ 4 billion from the US$ 3.5 billion recorded in the third quarter of 2007.

The geographic mix of sales continued to shift out of North America with sales increasing just +3% in North America and +22% in other regions. Furthermore, sales outside of North America represented 60% of total sales, up +4% on the same period in 2007.

“We are pleased to have set a new third-quarter sales record, particularly considering the recessionary conditions in North America and growing weakness in Europe and Japan,” said chairman and chief executive Jim Owens.

“Demand in emerging markets and commodity prices at levels that encourage investment in mining and energy have helped offset negative economic conditions in much of the developed world.

“We are pleased to report that despite difficult market conditions, Cat Financial has had good access to capital and continues to offer lending options to our customers,” continued Mr Owens.

“Looking at our full year outlook, we still expect sales to exceed US$ 50 billion for 2008, up from the US$ 44.9 billion that we achieved in 2007,” confirmed Mr Owens.