Caterpillar’s flat first quarter

Equipment manufacturer Caterpillar reported revenues of US$ 13.2 billion for the first quarter of 2014, a flat result compared to 2013. Net profit for the period was up +5% year-on-year to US$ 922 million.

The modest overall figures masked a jump in revenues from the company’s construction industries division, where sales were up +20% to US$ 5.06 billion, fuelled by a +36% increase in North American sales to US$ 2.09 billion.

But the construction industries result was tempered by another strong fall from Caterpillar’s resource industries business, which sells equipment to the global mining sector. Here, revenues were down -37% year-on-year in the first quarter to US$ 2.12 billion.

The energy and transportation division reported revenues of US$ 4.78 billion, up +8% compared to the first quarter of last year.

Caterpillar chairman and CEO Doug Oberhelman said, “Given the business and economic uncertainties around the world and continuing decline in our mining sales, I am pleased with our performance in the first quarter.

“This was a quarter that clearly highlighted the diversity of Caterpillar’s business across industries and regions of the world, and how that diversity continues to help us through the downturn in mining. Both energy and transportation, and construction industries had good results in the first quarter and performed at levels better than we expected.”

2014 outlook

Caterpillar said its outlook for full-year 2014 sales and revenues remained unchanged at US$ 56 billion in a range of ±5%. However, it increased its profit outlook by US$ 0.25 per share to US$ 5.55 per share – a forecast that includes expected restructuring costs of US$ 0.55 per share.

However, while its outlook for sales and revenues remained unchanged overall, Caterpillar said its expectations for the construction industries division had improved, but its expectations for resource industries had declined.

Caterpillar now expects its construction industries sales to increase around +10% from 2013 for the full year, a +5% increase from its previous forecast. In contrast, full-year resource industries sales are expected to be down -20% from 2013, deeper than the previous forecast of a -10% decrease.

The full-year 2014 revenue forecast for the energy and transportation business remains unchanged at a +5% increase.