28.01.2010

Profits plunge at Cat

Caterpillar the world’s largest construction equipment company has reported its full year 2009 results. Revenues for the 12 months fell by 37 percent to $32.4 billion, the largest percentage fall since the 1940’s.

Pre-tax profits were hit hard by lower volumes and restructuring costs, falling 87.5 percent to $569 million. The fourth quarter saw revenues dip 39 percent, while pre-tax profits fell 66 percent.

The company is more positive about 2010 stating that it expects an improvement in revenues through the year through increased volume and marginal price improvements, while material costs are expected to remain stable. It expects this to translate into improved profitability helped by its lower cost base and absence of any planned headcount reductions.

Chief executive Jim Owens said: “While the economy in 2009 was the worst our company has experienced since the Great Depression, I’m proud to report that Team Caterpillar responded in an extraordinary way. We delivered solid profitability and cash flow and dramatically improved our balance sheet. In addition, we had continued access to debt markets, improved our liquidity position, expanded credit facilities and made a conscious decision to hold more cash. As a result, we maintained our dividend rate, made significant pension contributions and continued to invest in new products and selective new capacity.”

Our employees, dealers and suppliers in every region of the world pulled together to achieve these results, and we thank them for their hard work and sacrifice. As a result, we are exceptionally well positioned for continued industry leadership and growth as the global economy recovers.”

Vertikal Comment

It is good to see such a major player at Caterpillar predicting an improving situation for this year. As to its 2009 results it has fared considerably better than most large specialist manufacturers, particularly in the aerial lift market.

While its profits have crashed badly, it is still posting a profit in what it admits has been the worst year for at least 60 years.

All said and done this is an encouraging year end report.