Caterpillar Inc., Peoria, Ill., last week reported second-quarter 2003 profit of $399 million, or $1.15 per share, up from profit of $200 million or 58 cents per share a year ago. Through the first half of 2003, sales and revenues were $10.75 billion, an increase from $9.7 billion a year ago. Profit was $528 million or $1.52 per share, up dramatically from $280 million or 81 cents a share in the same period a year earlier.
Sales and revenues were a record $5.93 billion, up 12 percent compared to $5.29 billion in the second quarter 2002. The increase was primarily due to a favorable currency impact of $221 million primarily because of the stronger euro and Australian dollar, higher machinery and engine volume of $213 million and improved revenue yield of $107 million. Financial Products’ revenues for the second quarter increased $55 million or about 15 percent compared to the second quarter 2002.
Partially offsetting these favorable items was $69 million of higher retiree pension, healthcare and related benefit costs and the $22 million net unfavorable impact of changes in emissions standards.
Chairman and CEO Glen Barton noted that the company benefited from a machinery replacement cycle among its consumer base, including rental companies who are now beginning to replace their fleets after a period of aging.
Caterpillar also announced last week it would redeem all its $250 million issue of 6 percent debentures, due May 1, 2007. The debentures will be redeemed August 16, 2003, the redemption date, at 100 percent par value, plus accrued interest. This redemption allows Caterpillar to retire high-interest outstanding debt using either available cash or low-interest commercial paper, or both.
Caterpillar shares closed at $65.61 Friday on the New York Stock Exchange.