Revenues climb, profits drop for Cat

Caterpillar Inc. reported sales and revenues of $5.49 billion and profit of $271 million for its second quarter of 2001. Its revenues rose $125 million, 2% higher than second-quarter 2000 results, but profits dropped $44 million, 14% lower than second-quarter 2000 results, the company said.

Caterpillar said a 2% increase in physical sales volume and a 16% increase in financial products revenues were partially offset by an unfavorable impact from the stronger U.S. dollar on sales denominated in currencies other than U.S. dollars. Company profits also dropped because of what Caterpillar called the “unfavorable impact of cost inefficiencies caused by significant volume shifts at some manufacturing facilities, and higher selling, general and administrative expenses.”

The company added, however, that its financial results for the first half of the year were in line with expectations. Its diversification efforts allowed Caterpillar to achieve “solid financial results,” it said, despite slow North American truck engine demand and prolonged weakness in general construction.

The company continues to expect full-year 2001 sales and revenues to be flat compared with 2000 results. Full-year profit is projected to be down about 5% to 10% and its sales and profit projections remain unchanged from January, even though the forecast for worldwide economic growth is lower than anticipated, Caterpillar said.