Caterpillar reports big falls

07/12/2009

Caterpillar reported a decline of 50 percent in worldwide machinery sales for the three months ending in October. The manufacturer of construction equipment said sales for the three months ending in October in North America were down 58 percent since last year while sales in Europe, the Middle East and Africa were down by 53 percent. Latin America and Asia Pacific saw the least decline in sales, of 41 percent and 36 percent, respectively, from the same period a year prior.

Engine sales at the Peoria, Ill., company dropped 30 percent from the year prior, and the company plans to exit the truck engine market by the end of 2009

Cat Financial reported third-quarter revenues of $676 million, a decrease of $84 million, or 11 percent, compared with the third quarter of 2008. Third-quarter profit was $76 million, a $42 million, or 36 percent decrease from the third quarter of 2008.

Cat Financial said its new retail financing was down 59 percent or $1.8 billion, a decrease of $2.6 billion from the third quarter of 2008. The decrease occurred across all Cat Financial operating segments. Year-to-date through September, new retail financing was $5.2 billion, down from $12.5 billion or 58 percent lower than for the same period in 2008.

Cat said the decrease in revenues was principally due to a $77 million impact from a decrease in earning assets (finance receivables and operating leases at constant interest rates) and a $23 million impact from returned or repossessed equipment, partially offset by a $20 million impact from higher interest rates on new and existing finance receivables.

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