Caterpillar Inc. today reported first-quarter 2013 sales and revenues of $13.21 billion, a 17-percent decline from $15.98 billion in the first quarter of 2012. Profit was $880 million in the first quarter of 2013, off 45 percent compared with $1.586 billion in the first quarter of 2012. Profit per share was $1.31 in the first quarter of 2013, down from first-quarter 2012 profit per share of $2.37.
“In our year-end 2012 financial release, we said the first quarter of 2013 would be challenging, and it certainly was,” said Doug Oberhelman, Caterpillar chairman and CEO. “As expected, inventory changes were a major factor. Caterpillar and our dealers usually add inventory in the first quarter to prepare for higher end-user demand in the spring and summer. In the first quarter of 2012, we added about $2 billion to inventory, but this year, we cut inventory by about a half billion dollars. In the first quarter of 2012, Cat dealers added machine inventory of about $875 million, and this year, they reduced machine inventory by about $700 million. Those are significant year-to-year swings, and coupled with moderating end-user demand, resulted in sales and revenues being down 17 percent.
“Considering the magnitude of the decline in sales and production, I am very pleased with our performance in the first quarter. We did a good job managing costs and made even more progress on inventory reduction. Operating cash flow was a highlight in the quarter and improved nearly $900 million from the first quarter of 2012. Better cash flow and the strength of our balance sheet are enabling us to resume stock repurchases.”
The company revised its outlook for 2013 to reflect sales and revenues in a range of $57 to $61 billion, with profit per share of about $7.00 at the middle of the sales and revenue outlook range. The previous outlook for 2013 sales and revenues was a range of $60 to $68 billion and profit per share of $7.00 to $9.00.
“What’s happening in our business and in the economy overall is a mixed picture,” said Oberhelman. “Conditions in the world economy seem relatively stable, and we continue to expect slow growth in 2013.
“As we began 2013, we were concerned about economic growth in the United States and China and are pleased with the relative stability we have seen so far this year. In the United States, we are encouraged by progress so far and are becoming more optimistic on the housing sector in particular. In China, first-quarter economic growth was slightly less than many expected but, in our view, remains consistent with slow growth in the world economy. In fact, our sales in China were higher in the first quarter of 2013 than they were in the first quarter of 2012, and machine inventories in China have declined substantially from a year ago.
“From an operational standpoint, we have taken action to align production, costs and capital expenditures with the sales and revenues outlook. While 2013 will be a challenging year, we are confident about the long-term prospects for our business, and when conditions improve, the steps we have taken will position us well to serve our customers and deliver better financial results,” Oberhelman added.
In February 2007, the board of directors authorized the repurchase of $7.5 billion of Caterpillar stock, and in December 2011, the authorization was extended through December 2015. Through the end of 2008, $3.8 billion of the $7.5 billion authorization was spent, and no shares of stock have been repurchased since then. We will resume the program in the second quarter and expect repurchases of about $1 billion.
“The recent decline in the Caterpillar stock price combined with balance sheet strength and positive cash flow has provided an opportune time to resume the stock repurchase program,” Oberhelman said.
Caterpillar is headquartered in Peoria, Ill.
