Construction and mining equipment maker Caterpillar, Inc. (CAT) reported Monday a profit for the first quarter that declined 45 percent from last year, reflecting double-digit drop in revenues amid declines across its operating segments and regions, except financial products. Both earnings per share and quarterly revenues missed analysts' expectations. Looking ahead, the company lowered its forecast for full-year 2013, citing anticipated declines in mining equipment sales.
"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," Chairman and CEO Doug Oberhelman said.
The Peoria, Illinois-based company reported net income of $880 million or $1.31 per share for the first quarter, down 45 percent from $1.59 billion or $2.37 per share in the prior-year quarter. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $1.40 per share for the quarter. Analysts' estimates typically exclude special items.
Total sales and revenues for the quarter declined 17 percent to $13.21 billion from $15.98 billion in the same quarter last year, and missed fifteen Wall Street analysts' consensus estimate of $13.72 billion.
Machinery and power systems sales declined 18 percent to $12.48 billion, while financial products revenues grew 5 percent to $726 million from the year-ago quarter.
The company reported double-digit sales declines across its machinery and power systems operating segments. Resource industries sales were down 23 percent, construction industries sales decreased 17 percent, and power systems sales declined 12 percent from last year.
While sales in Asia/Pacific declined, sales increased in China and were about flat in Japan. North American sales also declined 20 percent from last year.
Additionally, the company said it will resume its share repurchase program in the second quarter and expects repurchases of about $1 billion. The company has not repurchased any shares since the end of 2008.
Looking ahead to fiscal 2013, Caterpillar said it now anticipates earnings at the lower end of the prior guidance range of $7.00 to $9.00 per share, and also lowered its sales and revenues forecast to a range of $57 billion to $61 billion from the previous guidance between $60 billion and $68 billion.
Street is currently looking for full-year 2013 earnings of $7.71 per share on annual revenue of $62.74 billion.
The company noted that the lower profit expectation for 2013 is primarily a result of the decline in expected sales and revenues due to a projected sales decline of about 50 percent from 2012 for traditional Cat machines used in mining and a decline of about 15 percent for sales of machines from the Bucyrus acquisition.
"What's happening in our business and in the economy overall is a mixed picture. Conditions in the world economy seem relatively stable, and we continue to expect slow growth in 2013," Oberhelman added.
Separately, Caterpillar's unit Cat Financial reported first-quarter profit of $141 million, up 18 percent from last year. Profit before income taxes was $187 million, compared to $170 million in the year-ago quarter.
Revenues for the quarter grew 2 percent from the prior-year period to $680 million from the prior-year quarter.
CAT closed Friday's regular trading session at $80.43, down $0.52 on a volume of 7.01 million shares. In the past 52-week period, the stock has been trading in a range of $78.25 to $108.79.
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