Caterpillar Inc. (CAT) announced third-quarter 2012 sales and revenues of $16.445 billion, a 5-percent increase from third-quarter 2011 sales and revenues of $15.716 billion. EPS per share for Q3 2012 was $2.54, up 49 percent from $1.71 per share in Q3 2011.
“Last quarter and then again a month ago at MINExpo, we discussed economic and geopolitical headwinds facing the world, and we are certainly continuing to see the impact of those uncertainties in our business,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman. “Even so, we had a record third quarter, and our entire organization is focused on finishing 2012 as the best year for sales and profit in our history,” Oberhelman added. “Despite the turbulence in the global economy, we continue to track toward our
goals on cost control, margin improvement, product quality, safety and better product availability for our
Earnings Release MACRO Notes
- From an economic standpoint, 2012 has been a disappointment with lower than expected growth in the United States and China, and with much of Europe in recession.
– While governments and central banks around the world have been easing policies, it is now evident that these actions have not been sufficient to benefit 2012 growth.
- While most countries have eased monetary and credit policies over the past year, and we expect continued easing in 2013, growth has been slow to respond. As a result, we are not expecting improvement in overall economic growth until the second half of 2013. We are expecting 2013 economic growth of about 2.7 percent, up slightly from the 2.5-percent growth we expect for 2012.
- In the United States, the Federal Reserve’s new emphasis on employment, along with signs that banks are increasingly willing to lend, are positives for private sector economic growth. Overall, we expect about 2 percent economic growth in the United States for 2013.
- We do not see signs that governments in the Eurozone and the European Central Bank will change economic policies to deal with recession, record unemployment and social unrest. Consequently, we are expecting only marginal growth in 2013, and construction activity will likely remain weak.
- The Bank of Japan is facing increased pressure to aggressively battle deflation, and we expect it will increase liquidity further. However, recent economic weakness is likely to persist well into 2013, resulting in economic growth below 1.5 percent.
- We expect low interest rates will benefit construction in Australia, but mining investment is likely to slow. We expect less than 3 percent economic growth in Australia for 2013.
- Developing economies, while slowing, have fared better than developed economies and are expected to respond more favorably to recent policy easing. We expect growth in these countries will improve more than a half percentage point in 2013 to around 5.5 percent.
- In China, banks have been increasing lending, and the government announced acceleration of infrastructure programs. We expect additional easing in 2013 and project economic growth will improve to 8.5 percent. Construction activity and demand for commodities will likely increase.
- Economic growth in Latin America is expected to improve to almost 4 percent in 2013, driven primarily by a rebound in Brazil. Economic growth in Africa, the Middle East and CIS should be around 4 percent. Slightly better world economic growth and higher commodity prices should benefit these regions.
- In assessing the last two years, we concluded the financial crisis left many economies in fragile condition and that quickly raising interest rates once the recovery started was a bad idea. Although most central banks retreated, the impact contributed to a decline in world economic growth from about 4 percent in 2010 to less than 2.5 percent in 2012. Business confidence deteriorated and another round of investment cutbacks is beginning. We are concerned that central banks will be too quick to raise interest rates when growth improves, again preventing the world economy from completely recovering from the financial crisis.
Caterpillar worldwide full-time employment was 129,113 at the end of the third quarter of 2012 compared with 121,513 at the end of the third quarter of 2011, an increase of 7,600 full-time employees. The flexible workforce decreased by 2,954 for a net increase in the global workforce of 4,646.
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