Caterpillar Inc. excavators will be sold at Whayne Supply Co. in Louisville, Kentucky, USA, in 2020. Monday, January 27th.
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Industrial machinery maker Caterpillar said Friday that cost cuts and priority spending helped offset a $ 1.4 billion drop in vendor inventories in the second quarter and deliver better-than-expected results.
The equipment manufacturer, based in Deerfield, Illinois, posted an adjusted profit of $ 1.03 on revenue of $ 10 billion. According to the Refinitiv consensus, analysts expected quarterly revenue to be just $ 9.38 billion.
While sales of $ 10 billion were better than analysts had expected, they were down 31% from the $ 14.4 billion reported by the company in the second quarter of 2019.
Including losses on pension obligations, Caterpillar’s uncorrected EPS was 84 cents in the second quarter.
Caterpillar stocks, a member of the Dow Jones Industrial Average, rose 2% in preschool sales.
The company said the steadily declining need for equipment as a result of the Covid-19 pandemic forced dealers to run out of about $ 1.4 billion in machinery and engine inventory in three months, up from about $ 500 million a year ago.
That’s why cost-cutting initiatives and tight cost savings were so critical to the company’s success in the second quarter, management said in a statement attached to the financial results.
“We are well prepared for this difficult time with the success of our strategy,” said Caterpillar CEO Jim Umpleby in a press release. “We focus on employee safety and maintaining a competitive and flexible cost structure by continuing to invest in services and expanded offerings to better serve customers. We will adapt production when conditions require it.”
Analysts have lowered expectations for Caterpillar’s top and bottom lines as the coronavir is increasingly hurting capital spending and reducing vendor demand for the manufacturer’s equipment.
The impact of the coronavirus was reflected in all of Caterpillar’s financial results and appears to have monitored its progress during the second quarter, depending on the geographic region.
For example, North American construction sales fell 54% from a year earlier as builders delayed projects.
However, in Asia-Pacific, where the spread of the disease is likely to slow, construction sales fell by only 10% year-on-year, much better than 31%. Caterpillar’s first-quarter results declined. .
According to the Securities and Exchange Commission, in April. The company benefited from a new $ 3.88 billion. USD short-term credit facility, which expires in 2020. At the end. Many U.S. manufacturers sought similar short-term lines of credit during the pandemic to secure their balance sheets.
The company’s board last month voted that its quarterly dividend payment of $ 1.03 per share should be paid to shareholders on Aug. 20.
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