Caterpillar Inc. effectively responded to unprecedented customer demand in 2005 and reported full-year sales and revenues of $36.339 billion and profit per share of $4.04. Sales and revenues rose 20 percent from 2004, and profit per share was up 40 percent—both were records. Fourth-quarter sales and revenues of $9.663 billion and profit per share of $1.20 were both all-time records for any quarter in Caterpillar history.
“2005 was an incredibly strong year for us,” said Caterpillar Chairman and Chief Executive Officer Jim Owens. “With the surge in customer demand and production, our employees, suppliers, and dealers have responded in spectacular fashion to help us realize the opportunity. We should celebrate our 2005 accomplishments knowing Caterpillar is extremely well-positioned going forward.”
Sales and revenues of $36.339 billion for 2005 were up $6.033 billion or 20 percent from 2004. The increase was a result of $3.715 billion of higher sales volume, $1.827 billion of improved price realization, and a $363 million increase in Financial Products revenues.
Profit of $2.854 billion or $4.04 a share was up 40 percent. The improvement was primarily the result of higher price realization and sales volume, partially offset by an increase in core operating costs. The increase was a result of higher material costs, primarily steel, and costs to support higher volume and ongoing investment in new products and technology.
“Our focus this year has been on meeting customer delivery expectations while creating stockholder value. I’m gratified by what Team Caterpillar has accomplished in the face of unprecedented demand,” Owens said. “Over the past two years we’ve more than doubled production at several of our manufacturing facilities, particularly those manufacturing large machines. We’ve done this without additional bricks and mortar and with a focus on managing our period cost structure.”
In 2006, the company expects sales and revenues of about $40 billion and profit per share between $4.65 and $5.00. “2006 should be another year of excellent growth for Caterpillar,” Owens said. “Most of the industries we serve are strong, and the fundamental economic picture remains positive. Our emphasis is on execution with 6 Sigma as we implement our new strategy to achieve our 2010 goals, with even greater focus on improving employee safety, product quality and product availability.”
Caterpillar Financial Services Corporation (Cat Financial) reported record revenues of $2.35 billion for 2005, an increase of $430 million or 22 percent compared with 2004. Profit after tax was a record $364 million, a $77 million or 27 percent increase over 2004.
Of the increase in revenues, $258 million resulted from the impact of continued growth of finance receivables and operating leases (earning assets), $156 million from the impact of higher interest rates on new and existing finance receivables, and $16 million from associated fees and various other revenue items.
Caterpillar Vice President and Cat Financial President Kent Adams said, “2005 was a record year for Cat Financial. New business increased to record levels due to strong growth in Cat equipment sales, portfolio quality improved significantly as past dues fell to very low levels, and profit rose to a record amount despite a rising interest rate environment. These results would not have been possible without our employees’ commitment to provide outstanding service to our customers.” IBI