Caterpillar Inc. chairman and CEO Jim Owens last week told a group of financial analysts and institutional stockholders that Caterpillar’s strategic trough planning has positioned the company for long-term profitability under various economic scenarios. Owens and his leadership team outlined Caterpillar’s business strategy, and how the company has swiftly responded to the current global recession during two days of meetings last week in Peoria, Ill., where the company in headquartered.
During the presentations, Owens and his leadership team said Caterpillar expects profits in the $8-10 per share range within five years if the global economy experiences a “normal” recovery cycle. They indicated Caterpillar has implemented plans to generate annual profits of $2.50 per share during future recessionary conditions, and outlined Caterpillar’s ability to generate significant cash flow.
In addition, Owens reaffirmed Caterpillar’s 2009 outlook for sales and revenues in a range of $32 to $36 billion with a 2009 profit range of $0.40 to $1.50 per share including redundancy costs of about $0.75 per share for the year.
“We believe a recovery will come and that Caterpillar will benefit from the world’s need for the products we make,” said Owens. “In the last eight months, Team Caterpillar has demonstrated remarkable agility as we responded to rapid changes in the global economy. Looking forward, there is far too much uncertainty to know when the global economy will turn toward robust positive growth, but no matter what happens, Caterpillar has the people, products, dealer support and strategies to prosper and to support our customers as they make sustainable progress possible in every region of the world.”
With 2008 sales and revenues of $51.32 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.