Caterpillar Inc. today announced second-quarter results that were better than the company and analysts expected, yet is looking with caution to the second half of the year.
Caterpillar reported a net profit for the quarter that ended June 30 of $550 million, or 93 cents a share, down from a revised $802 million, or a revised $1.31 a share, a year earlier.
Excluding restructuring costs, profit per share was $1.09, down from $1.40 in the quarter a year earlier. Second-quarter 2016 sales and revenue were $10.3 billion, down 16 percent from $12.3 billion in the quarter last year.
“I’m pleased with our financial performance and focus on our long-term strategy, given the difficult economic and industry environment we’re facing,” Caterpillar chairman and CEO Doug Oberhelman said in a statement. “Our goal when sales decrease is to lower costs so the decline in operating profit is no more than 25 to 30 percent of the decline in sales and revenues.”
For the quarter, the company’s decremental operating profit pull-through was better than its target range, he said.
“Together with our dealers, we’re having success managing through the downturn in industries like mining and oil and gas, and in sluggish economic conditions in much of the developing world,” Oberhelman said.
“In what is likely to be our fourth down year for sales and revenues, we’re proud of what we’re accomplishing — our machine market position has increased, including in China, product quality continues to be at high levels, and the safety in our facilities is world-class.”
World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets the company serves, Caterpillar said. Commodity prices appear to have stabilized, but at low levels. Global uncertainty continues, and the recent Brexit outcome and the turmoil in Turkey add to risks, especially in Europe.
The company expects 2016 sales and revenue to be at the bottom end of its outlook in a range of $40 billion to $42 billion, and profit at $3 a share.