Peoria, Ill.-based Caterpillar Inc. last week reported record first-quarter profit per share of $1.23, a $0.03 per share improvement from the first quarter of 2006. These results came despite severe weakness in two important North American industries. Sales and revenues of $10.01 billion were also a first-quarter record and were up 7 percent, or $624 million, from $9.39 billion in last year's first quarter.
“Despite major headwinds in North America related to housing and the sharp drop in demand for on-highway truck engines, Team Caterpillar stepped up to deliver a solid first quarter," said Jim Owens chairman and CEO. “Our global reach, the breadth of our product line, the wide reach of the industries we serve and the strength of our diversified service businesses all contributed to our success in the first quarter. While we expected a sales decline in on-highway truck engines and U.S. housing-related markets, the continued strength in most of the other industries we serve and exceptional growth outside North America helped us deliver good results in a tough quarter.”
The increase was partially offset by a $996 million decline in sales volume in North America, which was largely a result of lower dealer machine inventories, a sharp drop in demand for on-highway truck engines and weak construction activity in North America, particularly in the U.S. housing market.
Profit of $816 million was down $24 million from the first quarter of 2006. Higher core operating costs and a higher tax rate more than offset the favorable effects of improved price realization, a $46 million gain on the sale of a security and the addition of Progress Rail.
“Our focus in 2007 is on execution in the areas of safety, quality and velocity,” said Owens. “Throughout the company, we are using 6 Sigma with the Cat Production System to improve safety and quality, add capacity and improve cost management.”
The company increased the 2007 outlook for sales and revenues and profit per share. Full-year sales and revenues are expected to be in a range of $42 to $44 billion, up from $41.5 billion in 2006, and profit in a range of $5.30 to $5.80 per share, up from $5.17 per share in 2006. The previous outlook was for sales and revenues of $41.5 to $43.6 billion and profit per share of $5.20 to $5.70.
With 2006 sales and revenues of $41.52 billion, Caterpillar is a leading international manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.