Canadian Mining Journal

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FINANCIAL: Caterpillar reports third-quarter 2016 results



PEORIA: Caterpillar Inc. today announced profit per share of $0.48 for the third quarter of 2016, a decrease from $0.94 per share in the third quarter of 2015.  Excluding restructuring costs, profit per share was $0.85, down from $1.05 per share in the third quarter of 2015.  Third-quarter 2016 sales and revenues of $9.2 billion were down 16 percent from $11.0 billion in the third quarter of 2015.

“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged.  In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.  “However, there were a few bright spots this quarter.  Both the construction industry and our machine market position improved in China.  Most commodity prices, while low, seem to have stabilized.  Parts sales have increased sequentially in each of the last two quarters.  Our machine market position and quality remain at high levels and our work on Lean and restructuring are continuing to help us lower costs.

“I’m pleased with how Caterpillar has responded and our team’s incredible focus on reducing costs and pulling through profit despite sluggish end markets.  In the third quarter, despite a $1.8 billion decline in sales and revenues, our operating profit pull through was significantly better than our target range.  Lower variable manufacturing costs of $234 million and lower period costs of $420 million enabled us to offset much of the negative impact from a weak sales environment and continue investment in products and digital capabilities,” said Oberhelman.

“As you know, I’ve decided to retire after 41 years at Caterpillar, and Jim Umpleby will succeed me as CEO.  He’s been a key part of the leadership team for several years and is absolutely ready to lead Caterpillar.  I’m confident I’m turning over a company that’s ready for a better future.  We have a great team, our product portfolio is the best ever, our machine market position and quality remain at high levels and we’ve significantly improved our cost structure.  At some point, and I think we’re getting closer to that point, our businesses will turn up.  Many of our businesses, including mining, oil and gas, rail and construction, are currently operating well below historical replacement demand levels in many parts of the world.  It’s a good time for Jim to take over as I know Caterpillar will deliver even better financial results when key industries begin to improve and get back to mid-cycle replacement demand levels,” said Oberhelman.

For the full financial results, visit www.caterpillar.com.