Peoria, Ill.-based Caterpillar Inc. last week reported record third-quarter 2006 sales and revenues of $10.5 billion and record third-quarter profit of $769 million, or $1.14 per share. Sales and revenues increased 17 percent, and profit per share was up 21 percent compared with the third quarter of 2005. Sales and revenues for the first nine months of 2006 of $30.5 billion and profit of $2.7 billion, or $3.86 per share, were also records.
"We achieved this quarter's results due in great part to the efforts of Caterpillar's employees, dealers and suppliers who continue to work to remove bottlenecks and increase production for a number of products," said Jim Owens, Caterpillar chairman and CEO. "Team Caterpillar remains focused on achieving our 2010 goals and executing our corporate strategy with 6 Sigma — especially in the areas of quality, safety and velocity."
Sales and revenues increased $1.5 billion — $1.1 billion from higher sales volume, $290 million from improved price realization, $97 million from the effects of currency and $90 million from higher financial products revenues.
Third-quarter profit increased $102 million from third quarter 2005. The increase was largely because of improved price realization and higher sales volume, partially offset by higher costs, including approximately $80 million of expense related to various legal disputes, principally a settlement with Navistar.
"We're into our fourth year of solid growth in many of the key industries we serve — mining, energy and infrastructure development in particular,” Owens said. “Our product line remains the global leader, and our brands are strong and recognized worldwide as the highest in customer value. We're well-positioned to build on these strengths going forward."
The company said it expects sales and revenues for 2006 to be about $41 billion, up about 13 percent from 2005, and profit per share to be in a range of $5.05 to $5.30. The previous outlook reflected sales and revenues up 12 to 15 percent and profit per share of $5.25 to $5.50. The decline from the previous outlook was a result of charges related to third-quarter legal disputes, higher core operating costs and slightly lower sales volume. Our preliminary outlook for 2007 sales and revenues is flat to up 5 percent from 2006, and profit per share is expected to be flat to up 10 percent from the midpoint of the 2006 outlook range.
"We're expecting slightly higher sales and revenues in 2007 despite the prospects of a slowing U.S. economy, a sharp drop in sales of on-highway truck engines and weaker housing construction," Owens said. "It's a testament to the strength and diversity of the industries we serve and the global nature of our products and services that we expect at least modest growth despite a weaker U.S. economy and significant declines in important North American markets. While next year will likely be a year of slower corporate growth, the fundamentals for key global industries we serve are strong, and after the 2007 pause, we expect continued solid growth through the end of the decade."
With 2005 sales and revenues of $36.3 billion, Caterpillar is a leading international manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and a growing offering of related services.