CHICAGO Caterpillar Inc. posted first-quarter net income of $880 million, down 44.5 percent from nearly $1.59 billion in the same period last year on revenue that slid 17.3 percent to $13.21 billion.
Caterpillar had warned investors that the first quarter would be challenging, "and it certainly was," chairman and chief executive officer Doug Oberhelman said in a statement April 22. "Inventory changes were a major factor. In the first quarter of 2012, we added about $2 billion to inventory, but this year we cut inventory by about a half-billion dollars."
Caterpillar dealers added machine inventory of about $875 million in the first quarter of 2012; this year, they reduced machine inventory by about $700 million, Oberhelman said. "Those are significant year-to-year swings and, coupled with moderating end-user demand, (they) resulted in revenues being down."
The company did manage costs while making additional progress on rightsizing inventories, he said.
The Peoria, Ill.-based company revised its sales outlook downward by 5 to 10 percent. "Whats happening in our business and in the economy overall is a mixed picture," Oberhelman said. "Conditions in the world economy seem relatively stable, and we continue to expect slow growth in 2013."
Domestically, Caterpillar is "encouraged by progress so far" and has grown more optimistic about the housing sector in particular. But globally, the company expects mining equipment sales to decline "significantly" in 2013.