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Last Update: 22-Apr-13 07:48 ET
Caterpillar shares show small decline in early pre-market trading following miss on earnings
Caterpillar (CAT $79.76 -0.87) reported first quarter earnings of $1.31 per share, $0.07 worse than the Capital IQ consensus of $1.38, while revenues fell 17.3% year/year to $13.21 billion versus the $13.93 bln consensus. The company lowered EPS guidance for FY13 to about $7.00 versus the $7.70 consensus, down from $7.00-9.00; lowered fiscal year 2013 revenue guidance to $57-61 billion versus the $63.03 billion consensus, down from $60-68 billion. "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," said Oberhelman.
"We have three large segments: Construction Industries; Power Systems; and Resource Industries, which is mostly mining. While expectations for Construction Industries and Power Systems are similar to our previous outlook, our expectations for mining have decreased significantly. Our revised 2013 outlook reflects a sales decline of about 50 percent from 2012 for traditional Cat machines used in mining and a decline of about 15% for sales of machines from our Bucyrus acquisition," said Oberhelman. The decline in the outlook for sales and revenues is primarily related to mining equipment sales. Resource Industries: Resource Industries' sales were $3.676 billion in Q1 of 2013, a decrease of $1.102 billion, or 23% , from Q1 of 2012. The sales volume decrease was primarily due to changes in dealer new machine inventories and decreases in dealer deliveries to end users. Dealer-reported new machine inventory decreased during Q1 of 2013 compared with an increase during Q1 of 2012. Improved price realization partially offset the decrease in sales volume. While sales for both new equipment and aftermarket parts declined, the more significant decrease was for new equipment. Sales decreased in every region of the world except Latin America. The increase in Latin America sales was primarily due to the timing of shipments in the first quarter of 2012. In Q1 of 2013, mining companies continued to reduce capital expenditures, and new orders continued to be weak and were well below first quarter of 2012. Resource Industries' profit was $477 million in Q1 of 2013 compared with $1.168 billion in Q1 of 2012. The decrease was a result of lower sales volume, higher manufacturing costs and the unfavorable impact from the acquisition of Siwei and the divestiture of portions of the Bucyrus distribution businesses. These decreases were partially offset by favorable price realization. Higher manufacturing costs were driven by lower production in Q1 of 2013 and unfavorable changes in cost absorption resulting from a decrease in inventory during Q1 of 2013 and an increase in inventory during Q1 of 2012. Depreciation expense also increased.
"We have three large segments: Construction Industries; Power Systems; and Resource Industries, which is mostly mining. While expectations for Construction Industries and Power Systems are similar to our previous outlook, our expectations for mining have decreased significantly. Our revised 2013 outlook reflects a sales decline of about 50 percent from 2012 for traditional Cat machines used in mining and a decline of about 15% for sales of machines from our Bucyrus acquisition," said Oberhelman. The decline in the outlook for sales and revenues is primarily related to mining equipment sales. Resource Industries: Resource Industries' sales were $3.676 billion in Q1 of 2013, a decrease of $1.102 billion, or 23% , from Q1 of 2012. The sales volume decrease was primarily due to changes in dealer new machine inventories and decreases in dealer deliveries to end users. Dealer-reported new machine inventory decreased during Q1 of 2013 compared with an increase during Q1 of 2012. Improved price realization partially offset the decrease in sales volume. While sales for both new equipment and aftermarket parts declined, the more significant decrease was for new equipment. Sales decreased in every region of the world except Latin America. The increase in Latin America sales was primarily due to the timing of shipments in the first quarter of 2012. In Q1 of 2013, mining companies continued to reduce capital expenditures, and new orders continued to be weak and were well below first quarter of 2012. Resource Industries' profit was $477 million in Q1 of 2013 compared with $1.168 billion in Q1 of 2012. The decrease was a result of lower sales volume, higher manufacturing costs and the unfavorable impact from the acquisition of Siwei and the divestiture of portions of the Bucyrus distribution businesses. These decreases were partially offset by favorable price realization. Higher manufacturing costs were driven by lower production in Q1 of 2013 and unfavorable changes in cost absorption resulting from a decrease in inventory during Q1 of 2013 and an increase in inventory during Q1 of 2012. Depreciation expense also increased.
