Caterpillar Is Looking to Dig Out From Covid-19

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Caterpillar (CAT) - Get Report is looking to dig out from Covid-19, posting earnings well below year-ago levels but reining in costs and beefing up its war chest.

The Deerfield, Ill.-based company said it earned $1.03 an adjusted share, well above the 64 cents analysts had been expecting but far below the $2.83 an adjusted share the company earned in the same period a year ago. 

Sales came in at $10 billion, above the $9.3 billion expected by the average of analysts polled by FactSet but still below last year’s $14.4 billion. 

Operating profit was $784 million, a drop of $1.429 billion, or 65%, compared with $2.213 billion in the second quarter of 2019, the company said – thanks to “lower sales volume and unfavorable price realization.” 

Machinery, energy and transportation-related revenue, the bulk of the company’s sales, was $9.31 billion, driven lower by both lower end-user demand and “changes among dealer inventories,” specifically a drop in stocking of new equipment on dealers’ lots.

Caterpillar did end the second quarter with $8.8 billion of enterprise cash and $18.5 billion of available liquidity sources. In July, Cat Financial issued $1.5 billion of new three-year and 18-month medium-term notes to supplement its liquidity position.

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