Caterpillar (CAT), a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, has recorded a 4.06 percent increase in profit for the quarter ended Jun. 30, 2014.
The company earned $999 million or $1.57 a share in the second-quarter compared with $960 million or $1.45 a share a year ago. Adjusted earnings per share came in at $1.69, when analysts expected $1.50.
Revenue during the second-quarter dipped 3.22 percent to $14,150 million from $14,621 million in the last year period.
Gross margin expanded by 180 basis points over the last year period to 26.86 percent. The company posted a drop in operating income to $1,475 million compared with $1,557 million in the previous year period. That has resulted in contraction of 23 basis points in operating margins to 10.42 percent.
"We're pleased with our second-quarter results, particularly the improvement in profit. We increased the bottom line despite a weak quarter for our Resource Industries segment, which is principally mining. Three key things are contributing to the continuing strength of our financial results-the diversity of our businesses, substantial success in operational improvements through the execution of our strategy and the strength of our cash flow and balance sheet," said Caterpillar chairman and CEO Doug Oberhelman.
"With half of 2014 now complete, we have tightened the outlook range for the year. The updated outlook for 2014 sales and revenues is a range of $54 to $56 billion. The previous outlook for sales and revenues was $56 billion in a range of plus or minus 5 percent ($53.2 to $58.8 billion). The range of expectations is tighter and the mid-point of the outlook is slightly lower. Most of the change in the mid-point of the range is in Construction Industries and reflects weaker sales in China, the CIS and in the Africa/Middle East region," it said.
Cash Flow
Caterpillar has generated cash of $4,134 million from operating activities during the first half, down 9.99 percent or $459 million when compared with the last year period. The company has generated 15.97 cents of operating cash flow in every sales dollar for the first half, down from 17.42 cents in the same period last year.
The company has spent $2,382 million cash to meet investing activities during the first half, as against cash outgo of $2,800 million in the last year period.
The company has generated net cash of $181 million from financing activities during the first half, as against cash outgo of $1,132 million in the last year period. It has borrowed net of $2,356 million through debt during the first half. It has spent net of $1,544 million on repurchase of common stocks.
The company's cash dividend payment increased 117.71 percent or $412 million to $762 million.
As on Jun. 30, 2014, the company's cash balance stood at $7,927 million, up from $6110 million on Jun. 30, 2013.
Debt Position
As on Jun. 30, 2014, total debt stood at $40,243 million, which was 45.82 percent of total assets. Its debt to equity ratio was at 1.92 as on Jun. 30, 2014.
Shares of Caterpillar went down by $3.54 or 3.27 percent to trade at $104.84on Thursday (10:18AM).
