Caterpillar Records Smaller First-Quarter Profit
28 April 2020 - 1:42PM
Dow Jones News
By Matt Grossman
Caterpillar Inc. reported a smaller first-quarter profit as
dealers slowed growth of their construction-equipment inventory
during the coronavirus pandemic.
The Deerfield, Ill.-based maker of construction equipment said
Tuesday that revenue fell by 21% to $10.64 billion, from $13.47
billion in the same quarter a year earlier. Wall Street's consensus
forecast was for revenue of $11.08 billion, according to
FactSet.
Dealers added significantly less inventory of the company's
machines and engines over the three-month period, Caterpillar said.
Dealer inventory increased by $100 million in the quarter, compared
with an increase of $1.3 billion a year earlier. Builders' demand
for equipment fell in both North America and China, the company
said, attributing the fall in Chinese demand to the Covid-19
pandemic.
Last week, the company took on a new short-term credit facility
of $3.88 billion, Caterpillar said in a filing with the Securities
and Exchange Commission. At the time, Caterpillar said it hadn't
yet drawn on the new facility, which expires at the end of
2020.
The move followed an announcement earlier in April that
Caterpillar would maintain its quarterly dividend payment of $1.03
a share planned for late May.
Caterpillar is one of many U.S. manufacturers that have turned
to new or existing sources of lending to firm up their balance
sheets during the coronavirus pandemic.
Caterpillar reported a first-quarter profit of $1.09 billion, or
$1.98 a share, compared with $1.88 billion, or $3.25 a share, in
the same quarter a year earlier. Caterpillar said its adjusted
earnings were $1.60 a share. Analysts had forecast adjusted
earnings of $1.69 a share.
Profit fell for all three of Caterpillar's major segments,
including construction industry, resource industry, and
energy-and-transportation equipment.
Write to Matt Grossman at matt.grossman@wsj.com
(END) Dow Jones Newswires
April 28, 2020 07:27 ET (11:27 GMT)
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