Caterpillar sees improvement in 2010

Caterpillar had sales of US$ 32.4 billion last year, a -37% fall on 2008's record figure of US$ 51.3 billion. The company's net profit was down -75% to US$ 895 million, compared to US$ 3.56 billion in 2008.

Commenting on the results, Caterpillar chairman and CEO Jim Owens said, "While the economy in 2009 was the worst our company has experienced since the Great Depression, I'm proud to report that Team Caterpillar responded in an extraordinary way. We delivered solid profitability and cash flow dramatically improved our balance sheet."

The company expects revenues this year to increase between +10% and +25% on 2009 levels, which is to say they will be between US$ 35.6 billion and US$ 40.5 billion. It highlighted China and other developing economies as showing signs of economic improvement, adding that there were also improvements in North America, Europe and Japan, but that these markets remained weak.

"We are encouraged by signs of improving demand," said Mr Owens. "Dealer sales to end users are up, order rates are up, dealer inventories came down in 2009, and we're seeing stronger service parts sales. As a result we are focussed on increasing production levels in our plants and with our suppliers."

Caterpillar's equipment sales were hit harder than those of its engines and financial products, with revenues falling -43% to US$ 18.1 billion. The steepest decline was in the Europe, Africa & Middle East (EAME) region, with a -55% drop in revenues. In contrast, equipment sales in the Asia-Pacific region were only down -21%.

Caterpillar's most important region last year remained North America, where equipment sales were down -45%. The drop in Latin America was slightly less severe, with a -38% fall in machinery revenues.

These falls in revenues saw Caterpillar's machinery business make an operating loss of just over US$ 1 billion last year. However, profits of US$ 1.46 billion from engine sales and a profitable financial products business kept the company as a whole in the black.

Last year saw Caterpillar embark on a huge round of job cuts in a bid to reduce costs. The company says that its worldwide headcount stood at 93813 people at the end of 2009, down 19074 from the same time a year ago.