Steel Markets

Caterpillar Sees Improvement in Construction Industries

July 24, 2014

Caterpillar said it was pleased with its second quarter results, particularly the improvement in profit despite weaker results in its mining segment. Profit after taxes was $146 million compared to $111 million in Q2 2013, an increase of 32 percent. Year over year revenue increased 5 percent to $728 million.

“Construction Industries had a good quarter with sales up 11 percent and operating profit up 83 percent from the second quarter of 2013,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman. “The improvement in Construction Industries, along with sales stability and record profit from Energy & Transportation, has helped us improve profit despite the downturn in the mining industry.”

Caterpillar tightened its forecast for 2014 sales and revenue to a range of $54 to $56 billion from the previous forecast of $53.2 to $58.8 billion.

“After a sizable drop in sales and revenues in 2013, our ongoing forecasting process has, since the third quarter of last year, pegged 2014 as a roughly flat year for sales. That’s still the case. There have been plusses and minuses, but they’ve both been relatively muted in the context of our total sales and revenues. While we’d certainly like to see improvement in economies around the world, and more specifically, the mining industry, the stability that we’ve seen this year has helped. Even though sales and revenues are relatively flat compared to last year, we’ve improved the bottom line with better execution and continued focus on costs,” said Oberhelman.

The company plans to repurchase approximately $2.5 billion of Caterpillar common stock in Q3 in addition to the $1.7 billion that was repurchased in first quarter.

“With a strong balance sheet, positive cash flow, sufficient cash on hand and more modest needs for capital expenditures, it makes sense to continue to reward stockholders,” said Oberhelman.