NASHVILLE, Tenn., July 24, 2019 /CNW/ -- Cat Financial
reported second-quarter 2019 revenues of $757 million, an increase of $34 million, or 5%, compared with the second
quarter of 2018. Second-quarter 2019 profit was $79 million, an $8
million, or 11%, increase from the second quarter of
2018.
The increase in revenues was primarily due to a $26 million favorable impact from higher average
financing rates and a $14 million
favorable impact from higher average earning assets, partially
offset by a $10 million unfavorable
impact due to the termination of a committed credit facility with
Caterpillar and the absence of the related fees.
Second-quarter 2019 profit before income taxes was $141 million, a $41
million, or 41%, increase from the second quarter of 2018.
The increase was primarily due to a $33
million decrease in provision for credit losses and a
$28 million increase in net yield on
average earning assets. These favorable impacts were partially
offset by a $14 million increase in
general, operating and administrative expenses and the $10 million unfavorable impact mentioned above
related to the termination of a committed credit facility with
Caterpillar.
The provision for income taxes reflects an estimated annual tax
rate of 29% in the second quarter of 2019, excluding the discrete
item discussed in the following paragraph, compared with 24% in the
second quarter of 2018. The increase in the estimated annual tax
rate is primarily due to changes in the geographic mix of
profits.
The provision for income taxes in the second quarter of 2019
also included a $13 million charge
for a valuation allowance against the deferred tax assets of a
non-U.S. subsidiary.
During the second quarter of 2019, retail new business volume
was $3.35 billion, a decrease of
$210 million, or 6%, from the second
quarter of 2018. The decrease was primarily driven by lower volume
in Asia/Pacific, North America and EAME (Europe, Africa, the Middle
East and the Commonwealth of Independent States (CIS)),
partially offset by higher volume in Mining.
At the end of the second quarter of 2019, past dues were 3.38%,
compared with 3.16% at the end of the second quarter of 2018. The
increase in past dues was primarily driven by EAME. Write-offs, net
of recoveries, were $74 million for
the second quarter of 2019, compared with $80 million for the second quarter of 2018. As of
June 30, 2019, the allowance for
credit losses totaled $523 million,
or 1.81% of finance receivables, compared with $534 million, or 1.89% of finance receivables at
March 31, 2019. The allowance for
credit losses at year-end 2018 was $511
million, or 1.80% of finance receivables.
"We were pleased with the performance of our portfolio and
business during the quarter, reflecting good operational execution
by the global Cat Financial team," said Dave Walton, president of Cat Financial and vice
president with responsibility for the Financial Products Division
of Caterpillar Inc. "Our team remains focused on executing the
strategy to help Caterpillar customers and dealers succeed through
financial services solutions."
For over 35 years, Cat Financial, a wholly owned subsidiary of
Caterpillar, has provided financial service excellence to
customers. The company offers a wide range of financing solutions
to customers and Cat® dealers for machines, engines, Solar® gas
turbines, marine vessels and various operational needs. Cat
Financial has offices and subsidiaries located throughout North and
South America, Asia, Australia, Europe, Africa and the Middle East, with its headquarters in
Nashville, Tennessee.
STATISTICAL
HIGHLIGHTS:
|
|
SECOND-QUARTER
2019 VS. SECOND-QUARTER 2018
|
(ENDED JUNE 30,
EXCEPT TOTAL ASSETS)
|
(Millions of
dollars)
|
|
|
2019
|
|
2018
|
|
CHANGE
|
Revenues
|
$
|
757
|
|
$
|
723
|
|
5%
|
Profit Before Income
Taxes
|
$
|
141
|
|
$
|
100
|
|
41%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
79
|
|
$
|
71
|
|
11%
|
Retail New Business
Volume
|
$
|
3,345
|
|
$
|
3,555
|
|
(6)%
|
Total Assets at June
30 and December 31, respectively
|
$
|
34,565
|
|
$
|
34,181
|
|
1%
|
SIX-MONTHS 2019
VS. SIX-MONTHS 2018
|
(ENDED JUNE
30)
|
(Millions of
dollars)
|
|
|
2019
|
|
2018
|
|
CHANGE
|
Revenues
|
$
|
1,493
|
|
$
|
1,413
|
|
6%
|
Profit Before Income
Taxes
|
$
|
283
|
|
$
|
224
|
|
26%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
177
|
|
$
|
162
|
|
9%
|
Retail New Business
Volume
|
$
|
5,697
|
|
$
|
6,097
|
|
(7)%
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements contained in this earnings release may be
considered "forward-looking statements" as that term is defined in
the Private Securities Litigation Reform Act of 1995. These
statements may relate to future events or our future financial
performance, which may involve known and unknown risks and
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievement to be materially
different from those expressed or implied by any forward-looking
statements. From time to time, we may also provide forward-looking
statements in oral presentations to the public or in other
materials we issue to the public. Forward-looking statements give
current expectations or forecasts of future events about the
company. You may identify these statements by the fact that they do
not relate to historical or current facts and may use words such as
"believes," "expects," "estimates," "anticipates," "will,"
"should," "plan," "project," "intend," "could" and similar words or
phrases. These statements are only predictions. Actual events or
results may differ materially due to factors that affect
international businesses, including changes in economic conditions,
disruptions in the global financial and credit markets, and changes
in laws, regulations and political stability, as well as factors
specific to Cat Financial and the markets we serve, including the
market's acceptance of our products and services, the
creditworthiness of our customers, interest rate and currency rate
fluctuations and estimated residual values of leased equipment.
These risk factors may not be exhaustive. We operate in a
continually changing business environment, and new risk factors
emerge from time to time. We cannot predict these new risk factors,
nor can we assess the impact, if any, of these new risk factors on
our businesses or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
projected in any forward-looking statements. Accordingly,
forward-looking statements should not be relied upon as a
prediction of actual results. All of the forward-looking statements
are qualified in their entirety by reference to the factors
discussed under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in our annual report on Form 10-K filed on February 14, 2019 with the Securities and
Exchange Commission for the fiscal year ended December 31,
2018 and similar sections in our subsequent quarterly reports on
Form 10-Q, which describe risks and factors that could cause
results to differ materially from those projected in the
forward-looking statements. Cat Financial undertakes no obligation
to publicly update forward-looking statements, whether as a result
of new information, future events or otherwise.
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SOURCE Cat Financial