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Caterpillar announces record product but lowers outlook for 2013

Oilfield Technology,

Caterpillar has announced record 2012 sales and revenues of US$ 65.9 billion, a 10% increase on 2011. Profit was up 15% to US$ 5.7 billion. However, Q4 profit was hit by a US$ 580 million write down on the company’s acquisition of ERA Mining Machinery Lid and its subsidiary, Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. Ltd. Quarterly profits were US$ 697 million compared to US$ 1.55 billion in Q4 2011. The company also blamed “lower sales and revenues and the cost impact from sharply lower production and the US$ 2 billion decline in Caterpillar inventory”, for the 55% drop. The quarter saw the fist decline in retail machine sales in more than two and half years as demand slowed by 7% in Asia and 6% in North America.

“From an operational standpoint, 2012 was a very successful year with record sales and profit in a tough economic climate. Considering the weak economy in the US, along with much of Europe in recession and China slowing, we had a solid year,” said Caterpillar chairman and CEO Doug Oberhelman. 

2013 outlook

Despite the positive spin, the company has lowered it outlook for 2013 is sales and revenues to US$ 60 – US$68 billion. “The range of our 2013 outlook reflects the level of uncertainty we see in the world today. We're encouraged by recent improvements in economic indicators, but remain cautious. While we expect some improvement in the US economy, growth is expected to be relatively weak. We believe China's economy will continue to improve, but not to the growth rates of 2010 and 2011. We also remain concerned about Europe and expect economies in that region will continue to struggle in 2013," said Oberhelman.

Adapted from press release by Jonathan Rowland.

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