Caterpillar 1Q profits dropped to $880 million, compared to $1.6 billion in 2012, on sales of $13.2 billion, down from $16.0 billion in 1Q 2012.
"Caterpillar and our dealers usually add inventory in the first quarter to prepare for higher end-user demand in the spring and summer," said Doug Oberhelman, chairman/CEO. "In the first quarter of 2012, we added about $2 billion to inventory, but this year, we cut inventory by about a half billion dollars. In the first quarter of 2012, Cat dealers added machine inventory of about $875 million, and this year, they reduced machine inventory by about $700 million. Those are significant year-to-year swings, and coupled with moderating end-user demand, resulted in sales and revenues being down 17 percent.”
Caterpillar revised its 2013 outlook to $57 to $61 billion, down from a forecast of $60 to $68 billion. Oberhelman said the economies of the United States and China are performing within expectations, but the mining sector has caused the company to "significantly" decrease expectations.
"Our revised 2013 outlook reflects a sales decline of about 50 percent from 2012 for traditional Cat machines used in mining and a decline of about 15 percent for sales of machines from our Bucyrus acquisition,” said Oberhelman.
Caterpillar will resume its stock-repurchase program in the second quarter and expects repurchases of about $1 billion. In February 2007, the Board of Directors authorized the repurchase of $7.5 billion of Caterpillar stock, and in December 2011, the authorization was extended through December 2015. Through the end of 2008, $3.8 billion of the $7.5 billion authorization was spent.