Caterpillar, Inc. (CAT) Misses Q2 EPS by 26c; Cuts FY13 Outlook

(Updated - July 24, 2013 7:47 AM EDT)

Caterpillar, Inc. (NYSE: CAT) reported Q2 EPS of $1.45, $0.26 worse than the analyst estimate of $1.71. Revenue for the quarter came in at $14.62 billion versus the consensus estimate of $15.03 billion.

Numbers compare with EPS of $2.54 and revs of $16.68 billion in the same period last year.

We experienced headwinds during the quarter, and while we had a positive $135 million gain related to the Siwei settlement, it was more than offset by currency translation and hedging losses, an additional $1 billion of dealer machine inventory reductions and a decline of $1.2 billion in our own inventory, commented chairman and CEO Doug Oberhelman. While these were significantly negative to profit in the second quarter, our outlook doesn't reflect additional currency losses or reductions in our inventory during the second half of 2013. As a result, we expect profit to improve in the second half of the year.

Machinery and Power Systems (M&PS) operating cash flow was $3.049 billion in the second quarter of 2013, compared with $1.281 billion in the second quarter of 2012.

Looking ahead, Caterpillar sees FY13 EPS of $6.50, versus prior guidance of $7 and the consensus of $6.84. The Company also sees FY13 revenue of $56 to $58 billion, versus prior guidance of $57 to $61 billion and the consensus of $58.67 billion. Oberhelman commented that the reduction was tied to expectations of a significant reduction in dealer machine inventory ... During the second quarter, dealers increased their utilization of inventory from our product distribution centers, which allows them to meet customer demand with less inventory. With the sharp reduction in dealer inventory and the decline in mining, 2013 is turning out to be a tough year and we've already taken action to reduce costs.

Caterpillar worldwide full-time employment was 122,402 at the end of the second quarter of 2013, compared with 132,825 at the end of the second quarter of 2012, a decrease of 10,423 full-time employees.

For earnings history and earnings-related data on Caterpillar, Inc. (CAT) click here.

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