Caterpillar Inc. announced first-quarter sales and revenues of $12.702 billion, down about 4 percent from first-quarter 2014 sales and revenues of $13.241 billion.
First-quarter 2015 profit included a pre-tax gain of $120 million, or about $0.14 per share, from the sale of Caterpillar’s remaining interest in the company’s former third-party logistics business. Caterpillar sold a majority interest in the business in 2012, and divested the remaining interest in the first quarter of 2015.
“We delivered solid results for the first quarter of this year, including higher profit than in the first quarter of 2014. Our focus on operational improvement, including lean manufacturing and cost management, is helping in what is a tough time for some of our important cyclical businesses. We continue to execute on improving safety, quality, inventory turns, delivery performance and market position,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.
“The first quarter wasn’t without challenges. Sales and revenues were off about 4 percent from the first quarter of last year, mining remained weak and construction was down in most regions. On the plus side, Energy & Transportation turned in another great quarter, although we don’t expect this to continue due to the oil-related portion of the business,” added Oberhelman.
The 2015 outlook for sales and revenues remains unchanged at about $50 billion. However, the outlook for profit per share has improved slightly. “We now expect that profit per share will be $4.70, or $5.00 per share excluding restructuring costs. The previous outlook for profit per share was $4.60, or $4.75 excluding restructuring costs. The expectation for restructuring costs is now about $250 million, $100 million higher than the previous outlook with the increase primarily related to facilities that produce mining products,” Caterpillar said in a release.
“We had a solid first quarter, which led to raising the profit outlook for 2015. However, we continue to face headwinds and uncertainty in 2015, and our outlook for the year reflects that,’Oberhelman said. “We expect sales and profit in each of the remaining three quarters of 2015 to be lower than the first quarter. We expect sales for oil applications to decline starting in the second quarter, and from a profit perspective, the first quarter included the gain on the sale of our remaining interest in the logistics business and that won’t repeat. The first quarter is usually the most seasonally favorable of the year for costs, and we don’t expect the rest of the year to be as favorable. In addition, we expect some increase in research and development expense as we go through the year.”