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Caterpillar Earnings See Strong Increase



PEORIA, Ill. -- Caterpillar Inc.'s second-quarter earnings surged 38 percent, reflecting its strongest financial performance in at least four decades, the construction equipment maker reported.

Caterpillar said higher prices helped sales top $10 billion for the quarter and it raised guidance for the full year, pointing to robust demand from nonresidential and highway construction markets.

A slowdown in the U.S. housing industry affected results, but the impact was more than offset by sales in other industries, including mining, energy and infrastructure development.

CEO Jim Owens told analysts it was “the best quarter in our history” and concluded Caterpillar’s most profitable first half since 1966, reflecting continuing strong fundamentals in those industries.

“Overall, we do not see 2006 as a peak for the industries we serve,” Owens said.

Second-quarter profit increased $286 million from second quarter 2005. The increase was largely due to improved price realization and higher sales volume, partially offset by higher core operating costs to support our growth.

First-half 2006 sales and revenues of $19.997 billion and profit of $1.886 billion were also records. Operating cash flow in the first half of 2006 was $1.948 billion, up $952 million from the first half of 2005.

“I am delighted with what has been accomplished, but we still have work to do," Owens said. "From an operational perspective, record demand has resulted in longer delivery times for many of our products than we, or our customers, would like. “We’re continuing to work with suppliers and within our factories to remove bottlenecks and increase production for a number of our products."


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December 6, 2019, 1:41 pm PDT

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