Caterpillar reported second quarter sales and revenue of $5.49 billion, up 2% from second quarter 2000. However, profit was $271 million, down 14% from a year ago.
"Continued strength in electric power and heavy construction and improved demand in coal mining and oil and gas sectors helped fuel second-quarter sales," said Caterpillar Chairman Glen Barton.
A 2 percent increase in physical sales volume and a 16 percent increase in Financial Products revenues were partially offset by the unfavorable impact of the stronger U.S. dollar on sales in currencies other than U.S. dollars. The profit decline was due primarily to cost inefficiencies caused by significant volume shifts at some manufacturing facilities, and higher selling, general and administrative expenses.
"Our performance through the first half of the year was in line with our expectations. The diversification of our business has allowed us to achieve solid financial results despite a collapse in North American truck engine demand and prolonged weakness in general construction,” Barton said.
Engine sales were $1.71 billion, down 1% from second quarter 2000. Physical sales volume increased 2%. The company said lower engine sales to North American truck manufacturers was more than offset by continued gains in sales of electric power solutions, higher worldwide demand in the oil and gas industries, and higher sales to commercial marine applications. Engine operating profit was $113 million, down from $171 million a year ago.
World economic growth and the growth of industrial production slowed sharply in the first half of 2001, Caterpillar said. The expansion slowdown is expected to continue through the third quarter, with world GDP growth for 2001 forecast at 2 to 2.5%, down from 4% in 2000.
In North America, GDP growth is projected to slow from 5% in 2000 to about 2% in 2001. Caterpillar expects spending and production rates to improve modestly in the second half, boosted by lower interest rates, federal tax cuts, a recovery in consumer confidence, and a lower rate of inventory reduction. The company expects a significant decline in truck engine demand for the year, offset by higher sales to the oil and gas and electric power sectors.
"Continued strength in electric power and heavy construction and improved demand in coal mining and oil and gas sectors helped fuel second-quarter sales," said Caterpillar Chairman Glen Barton.
A 2 percent increase in physical sales volume and a 16 percent increase in Financial Products revenues were partially offset by the unfavorable impact of the stronger U.S. dollar on sales in currencies other than U.S. dollars. The profit decline was due primarily to cost inefficiencies caused by significant volume shifts at some manufacturing facilities, and higher selling, general and administrative expenses.
"Our performance through the first half of the year was in line with our expectations. The diversification of our business has allowed us to achieve solid financial results despite a collapse in North American truck engine demand and prolonged weakness in general construction,” Barton said.
Engine sales were $1.71 billion, down 1% from second quarter 2000. Physical sales volume increased 2%. The company said lower engine sales to North American truck manufacturers was more than offset by continued gains in sales of electric power solutions, higher worldwide demand in the oil and gas industries, and higher sales to commercial marine applications. Engine operating profit was $113 million, down from $171 million a year ago.
World economic growth and the growth of industrial production slowed sharply in the first half of 2001, Caterpillar said. The expansion slowdown is expected to continue through the third quarter, with world GDP growth for 2001 forecast at 2 to 2.5%, down from 4% in 2000.
In North America, GDP growth is projected to slow from 5% in 2000 to about 2% in 2001. Caterpillar expects spending and production rates to improve modestly in the second half, boosted by lower interest rates, federal tax cuts, a recovery in consumer confidence, and a lower rate of inventory reduction. The company expects a significant decline in truck engine demand for the year, offset by higher sales to the oil and gas and electric power sectors.
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