Caterpillar Sales Jump Nearly 35 Percent in Fourth Quarter
Caterpillar posted $12.9 billion in sales in the fourth quarter, compared to $9.6 billion in the fourth quarter of 2016, a 34.4-percent year-over-year hike. Fourth quarter 2017 loss was $2.18 per share compared with a loss of $2 per share in the fourth quarter a year ago.
Full-year sales and revenues in 2017 were $45.5 billion compared to $38.5 billion in 2016, an 18.2-percent jump. Full-year profit was $1.26 per share compared with a loss of $0.11 per share in 2016.
Adjusted profit per share in the fourth quarter was $2.16 compared with Q416 adjusted profit per share of $0.83.
“After four challenging years, many key markets improved in 2017, and our global team delivered strong results,” said Caterpillar CEO Jim Umpleby. “We remain focused on operational excellence and made early investments in profitable growth initiatives as we began to implement our new strategy.”
Caterpillar begins 2018 with strong sales momentum resulting from strong order rates, lean dealer inventories and an increasing backlog. Also, there are positive economic indicators in most of the world and in many of the company’s end markets. Caterpillar is preparing its factories and suppliers to be ready for continued growth, while remaining focused on managing with a flexible and competitive cost structure that should enable the company to respond quickly if economic fundamentals change.
“We are in the early stages of implementing our strategy for profitable growth,” said Umpleby. “In 2018, we expect to make additional investments in the expanded offerings and services important for Caterpillar’s long-term success. We will use our operating and execution model to bias resources to areas that represent the greatest opportunity for return on our investments.”
In its Construction Industries division, the company expects growth in 2018 with some tempering in the latter part of the year, largely because of anticipated seasonality of sales in China. Caterpillar expects improvement in North American residential, non-residential and infrastructure. The outlook does not include any impact from a potential U.S. infrastructure bill. Europe and Asia/Pacific are expected to grow, and the recovery that started in Africa/Middle East and Latin America is expected to extend into 2018.
Sales increased in all regions in 2017 with the largest increase in North America. Sales improved 46 percent in North America, primarily because of higher end-user demand for both equipment and after-market parts. Changes in dealer inventories were favorable as dealer inventories decreased in the fourth quarter of 2016 and increased slightly in the fourth quarter of 2017. Europe/Africa/Middle East sales increased 38 percent, Asia/Pacific sales jumped 22 percent, with about half of the sales improvement emanating from China. Sales increased 39 percent in Latin America with stabilizing economic conditions in several countries.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.