Caterpillar Inc. today reported declines in revenue and profit for the second quarter of 2009, but chairman and CEO Jim Owens said he is seeing signs of stability in the economy.
"Credit markets have improved significantly. Fiscal policy and monetary stimulus have been introduced around the world, and we are seeing signs, particularly in China, that they are beginning to work," Owens said in a statement. "In addition, we've seen many key commodity prices increase from their lows in the first quarter, and they are holding in a range that is usually positive for investment."
Caterpillar reported a 41 percent drop in sales and revenue, to $7.9 billion in the 2009 quarter from $13.6 billion in the 2008 period. Machinery sales declined 49 percent to $4.3 billion, engine sales fell 32 percent to $2.9 billion, and financial products decreased 13 percent to $721 million.
The second-quarter profit fell to $371 million, or 60 cents per share, from $1.1 billion or $1.14 per share in the second quarter of 2008. The decline was largely a result of lower sales volume and $85 million of redundancy costs. These were partially offset by lower selling, general, administrative, and research and development expenses, favorable price realization, LIFO inventory decrement benefits and a lower tax rate.
"Team Caterpillar is now halfway through one of the most challenging years in the company's history," Owens said. "Our 2009 sales have been hurt by weak end-user demand and significant reductions in dealer inventory."
However, he continued, "We are very pleased with the way our people have stepped up and responded to this extraordinary period of economic turmoil."