Caterpillars record first-quarter results
CATERPILLAR, the worlds largest manufacturer of earth-moving equipment, reported after-tax profits for the first quarter up 9% at $430 million, on sales up 12% to $4.8bn.
The sales increase was driven partly from agricultural-related sectors within the domestic market. Machinery sales rose in Europe – except in the UK, which showed a decline – and in Brazil, Peru and Chile. Canada and Australia also generated increases.
Caterpillar said there was a sharp downturn in Asia, excluding Japan.
Group sales volumes were also down by about 10% between the fourth quarter of 1997 and the latest quarter, largely because of lower machine and engine sales outside the US.
The revenue increase was cited as the main factor behind the first-quarter profit rise. But Caterpillar acknowledged that operating profit margins on machinery and engines declined by a full percentage point, to 12.5%, compared with the first quarter of 1997.
The fall was attributed to spending on product line extension and additional product support.
The company believes that sales in 1998 should slightly exceed last years levels, with the profit level being “near that of 1997”.
- Financial Times 20/04/98 page 24