Caterpillar Inc. lowered its outlook for 2013 after reporting first-quarter profits today that dropped 45 percent to $880 million, or $1.31 a share, from $1.59 billion in 2012. Revenue also dropped 17 percent, lower than analysts’ expectations.
First quarter revenue and sales were $13.2 billion, a decline from $15.98 billion in the first quarter of 2012, the company announced.
“In our year-end 2012 financial release we said the first quarter of 2013 would be challenging, and it certainly was,” Caterpillar chairman and CEO Doug Oberhelman said in a statement. “As expected, inventory changes were a major factor. Caterpillar and our dealers usually add inventory in the first quarter to prepare for higher end-user demand in the spring and summer. In the first quarter of 2012 we added about $2 billion to inventory, but this year we cut inventory by about a half billion dollars. In the first quarter of 2012 Cat dealers added machine inventory of about $875 million, and this year they reduced machine inventory by about $700 million. Those are significant year-to-year swings, and coupled with moderating end-user demand, resulted in sales and revenues being down 17 percent.”
“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,” Oberhelman added. “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 [it] remains consistent with slow growth in the world economy.”
Expectations for two of the company’s three large segments — construction industries and power systems — are “similar” to the company’s previous outlook. Expectations for the resource industries segment of the company, which is mostly mining, are significantly reduced.
“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 percent for sales of machines from our Bucyrus acquisition,” Oberhelman said.
Caterpillar shares saw a 52-week high of $108.79 and the low was $78.25. The stock closed Friday at $80.46.