Caterpillar updates 2015 expectations
- Details
- Published on Monday, 24 September 2012 15:20
- Written by Paul Gordon
While profit expectations are lower, sales and revenues may reach $100 billion, company tells analysts
Caterpillar Inc. said Monday it expects sales and revenues to be between $80 billion and $100 billion in 2015.
But Chairman Doug Oberhelman, in a meeting with Wall Street analysts during MINExpo in Las Vegas, said profits per share probably will not be as high as originally expected because of worldwide economic uncertainty.
Still, he said, the company expects those profits to be in the range of $12 to $18 a share.
Caterpillar Inc. believes its sales and revenues could reach as high as $100 billion in the next three years, Wall Street analysts were told Monday during MINExpo in Las Vegas.
But its profits per share will likely be lower than originally expected because of worldwide economic uncertainty, the company's CEO said.
Caterpillar Chairman Doug Oberhelman told the analysts the company is committed to reaching the top 25 percent of the S&P 500 for total shareholder return and to do so it expects sales and revenues to be between $80 billion and $100 billon in 2015, which would easily be record range for the world's largest heavy equipment manufacturer.
Caterpillar's sales and revenues in 2011 were a record $60.14 billion, or $7.40 a share.
Profit would be expected to be in the range of $12 to $18 per share, Oberhelman said. It earlier had forecast profits to be in the range of $15 to $20 a share in 2015.
Caterpillar has a record of delivering on its expectations. For example, the last time Caterpillar did a three-year outlook, in 2009, it announced a goal of $60 billion in sales and revenues and profit-per-share of $8 to $10 in 2012.
"There are a number of geopolitical and economic factors driving uncertainty in the world today, but our base case scenario calls for modest global economic growth over the next few years," Oberhelman said. "We think this is a reasonable view and the most likely outcome, and based on that, we expect 2015 sales and revenues for Caterpillar to be in a range of $80 to $100 billion, and for profit in a range of $12 to $18 per share."
He added, however, that Caterpillar would again be prepared if another recession hits in the meantime. In the last recession that began in 2008, Caterpillar had a loss in only one quarter because of what it called "trough planning" in the event of economic downturn. The trough planning was business unit by business unit and included temporary shutdowns and layoffs and cuts in salaries and bonuses for management.
"Just as we have done in the past, Caterpillar is ready to act if we enter a recession. We don't think it's likely, but if it happens, we are prepared to react and would expect to remain attractively profitable and to maintain our dividend," Oberhelman said.
Also during the meeting with analysts, Caterpillar outlined operational improvements that occurred in the last few years — changes driven by the execution of the company's updated Vision 2020 strategy that includes a renewed focus on customers.
"We have done a great job of delivering on our strategy, and over the past 10 years we have delivered a total shareholder return near the top 15 percent of companies in the S&P 500," Oberhelman said. "From the shop floor to the executive office, we are all working to create a culture within Caterpillar that expects more from ourselves and delivers more to our customers. That attitude, along with a drive for constant improvement, is a requirement in today's highly competitive global marketplace. We are changing the culture of the company and building on Caterpillar's legacy to grow its leadership position."
MINExpo is the world's largest and most comprehensive trade show dedicated to the mining industry that is held in Las Vegas every four years at the Las Vegas Convention Center.
Caterpillar said it has the broadest line of both surface and underground mining and materials handling equipment available in the mining industry and is showcasing them at the event, which continues through Wednesday. Nearly 100 different Caterpillar dealerships are represented at the show. Dealer personnel and Caterpillar Global Mining staff will host almost 6,000 customers and business partners during MINExpo.
The company announced Monday that its exhibit, titled "Wherever There's Mining We're There," is the largest single exhibit ever presented at MINExpo. With more than 52,000 square feet of exhibit space, Caterpillar is also introducing new mining systems and machines during the event.
"There is no bigger stage to give us this remarkable opportunity to tell the Caterpillar mining story. We recognize that mining is at the core of an unprecedented drive for urbanization and modernization," said Oberhelman. "We still believe the long-term outlook is positive for this industry and we're uniquely positioned to capitalize on that growth. That's why the company has made major investments in mining across the Caterpillar organization, including the acquisitions of Bucyrus and Siwei. By combining organic growth with the growth that we expect to receive from these acquisitions, Caterpillar will better serve mining customers, which benefits our dealers, employees and stockholders."
In the last year, Caterpillar has added more than 100 products to its mining portfolio. The Caterpillar exhibit is divided into two areas — surface and underground — featuring more than two dozen products and technologies, including off-highway mining trucks, hydraulic shovels, the next generation D11T track-type tractor and a variety of underground mining machines such as continuous miners, a longwall shearer and plow, as well as other support equipment, the company said. In all there are 28 pieces of iron weighing 2,600 tons in Caterpillar's exhibit.
Among the new products being launched at MINExpo is the 6120B H FS hydraulic shovel. The 6120B is the first diesel-electric hybrid ultra-class shovel available in the industry, it said.
"Like our customers, Caterpillar is committed to building a better world. That's why when customers asked us to provide more products for the mining industry, the company responded in a big way, which is something we look forward to showing at MINExpo this week," said Steve Wunning, Caterpillar group president responsibility for Resource Industries. "Beyond just the iron, we understand the issues our customers face, such as safety, environmental stewardship, emissions standards and skills shortages and training, and we work together to address them. This will continue to be our focus."
Part of the Caterpillar is an Electro-Motive Diesel (EMD) SD70ACe locomotive — painted in Caterpillar yellow — that will give the mining world the chance to view the railroad technology that transports minerals to market. At 420,000 pounds, the massive locomotive is among some of the largest mobile equipment in the world.
Another big part of Caterpillar's week was the induction of former Chairman Glen Barton into the National Mining Hall of Fame last Saturday, also in Las Vegas. Barton, who retired in 2004 after five years at Caterpillar's helm, is credited with leading the company to a leadership position in the global mining industry.
"I am humbled and proud to be selected for this honor on behalf of Caterpillar and the many people who I've had the privilege of working with over the years," said Barton in a news release. "I will always have a passion for the mining industry and continue to recognize the importance of focusing on safety as well as educational efforts to help the public understand the role that mining plays in society."
Paul Gordon is editor of The Peorian. He can be reached at 692-7880 or editor@thepeorian.com
