Tag Archives: Caterpillar

Update: Here is the Journal Sentinel story.

Caterpillar has lowered its profit expectations, with the company saying it expects “fairly anemic and modest growth through 2015.”

Check out coverage from Bloomberg and Reuters. From Reuters:

The company now expects to earn $12 to $18 per share in 2015, down from its previous forecast of $15 to $20.

“It’s prudent, especially with what’s happened in 2011 and 2012 in the economy, to readjust,” Oberhelman said. “I, for one, am still thinking $15 to $20 (earnings per share by 2015), but we need better economic growth.” …

The new forecast comes a year after Caterpillar paid $7.6 billion for mining equipment maker Bucyrus International, the most in Caterpillar’s 87-year history.

The buyout added mining shovels and draglines to the company’s lineup of trucks and excavators to become the world’s largest producer of mining equipment. Given the weak economy, though, some on Wall Street have questioned the timing of the deal.

Among the world’s eight largest miners, only three are boosting capex spending next year. Vale (VALE5.SA), which has the largest capex budget among miners, plans to cut its 2013 mining budget by 4 percent from 2012 levels.

Capital expenditures in the mining sector could slip at least 10 percent by 2014, JPMorgan estimates.

Since roughly 70 percent of spending in mines is for large trucks, capex cuts are not good news for Caterpillar and peers that include Komatsu (6301.T).

Caterpillar spends roughly 30 percent of its own capex and most of its research and development dollars on mining products.

Also, Caterpillar’s new $37 million Visitors Center is expected to open next month in Peoria, Ill. Learn more in the Peoria Journal Star.

$1.7 billion. That’s how much profit Caterpillar reported for the quarter ended June 30, the company reported on Wednesday.

Check out coverage in the Milwaukee Journal Sentinel, Wall Street Journal and Reuters. From the Journal Sentinel story:

Last year’s acquisition of mining equipment maker Bucyrus International, of South Milwaukee, and engine maker MWM Holding GmbH provided a $1.37 billion boost to sales during the quarter.

Caterpillar is the world’s largest maker of construction and mining equipment, and its results are watched closely because they are considered an indicator of industrial activity and the health of the overall economy.

The company’s success this year is occurring even as U.S. construction activity remains depressed and well below the prior peak, and amid problems facing Europe and economic concerns in China, CEO Doug Oberhelman said in a statement.

“The good news is this doesn’t feel like 2008. Interest rates are low, central banks are prepared to inject more liquidity if needed, and housing is coming off lows, not a peak, and seems to be improving,” Oberhelman said.

Of course, word of the huge profits comes amid the ongoing strike in Peoria, Ill., where Caterpillar is seeking significant concessions from workers even during these boom times. WUWM, a National Public Radio station, tackled that issue in a piece this week, following up on a New York Times story published on Monday.

From the story:

At the Caterpillar factory in South Milwaukee, workers are wondering about the implications of the Joliet dispute on their contract. It’s up for renewal next spring.

Barry Lewis is a gear cutter at the plant, and vice president of United Steel Workers, Local 1343.

“Some people are very worried. We’re not sure how it equates to us, I mean, we’re aware that they’re United Auto Workers, we’re Steel Workers. The product lines are completely different,” Lewis says.

BizTimes.com is reporting that Caterpillar “plans to expand its presence in the Milwaukee area.”

See the story here. From it:

Caterpillar has considered leasing about 25,000 square feet of space in the Liberty Corporate Preserve I building at 10050 S. 27th St., Oak Creek, said Neal Driscoll, vice president of leasing and development at Liberty Property Trust, which recently sold that building and most of its southeastern Wisconsin portfolio.

One source said Caterpillar was seeking space in Oak Creek to create a data center.

Another source said the company is considering plans to create a data center, an engineering technology center and a plant in southeastern Wisconsin. The company is expected to announce its plans by early June, that source said.

Of course, my hope is that growth comes in South Milwaukee, even if that sounds unlikely. I’ll keep you posted.