Caterpillar Reports Highest Ever Quarter, Year, and Profit

January 26, 2007 • Caterpillar, Inc., Peoria, Ill., recorded a double-digit profit growth for the fourth year in a row and the third consecutive year of record sales and profit. Caterpillar reported total 2006 sales and revenues of $41.517 billion and profits of $3.537 billion, or $5.17 per share • a 28% increase from a year ago. The company also had a record fourth quarter with sales and revenues of $11.003 billion and profit of $882 million, or $1.32 per share, up 10% from last year.

 

In 2006, sales and revenues increased $5.178 billion - $3.321 billion from higher sales volume, $1.464 billion from improved price realization, $315 million from higher Financial Products revenues and $78 million from the effects of currency. Profit increased $683 million from 2005. The increase was largely due to improved price realization and higher sales volume, partially offset by higher core operating costs.

 

For the fourth quarter, Caterpillar's sales and revenues increased $1.34 billion with $951 million coming from higher sales volume and improved price realization created $190 million, $146 million was from the effects of currency, and higher Financial Products revenues brought in $53 million. Fourth-quarter profit increased $36 million from 2005. The increase was due to improved price realization and higher sales volume, despite an unfavorable geographic/product mix of sales and was largely offset by higher core operating costs.

 

In 2007, the company expects another record year with sales and revenues in a range of $41.5 to $43.6 billion, which is flat to up 5% from 2006, and profit in a range of $5.20 to $5.70 per share.

 

"I'm anticipating great things for Caterpillar in 2007. Despite a sharp decline in two key North American industries • on-highway truck engines and U.S. housing -• and an expected reduction in dealer inventories, we are projecting another record year in 2007," said Jim Owens, chairman and chief executive officer. "We expect to improve profit per share at a higher rate than sales and revenues, and that means a key focus in 2007 will be cost management."