DJ Caterpillar Inc.: Reports First-Quarter 2019 Results - Exhibit 99.1
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Caterpillar Inc.
Caterpillar Inc.: Reports First-Quarter 2019 Results - Exhibit 99.1
29-Apr-2019 / 23:50 CET/CEST
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The issuer is solely responsible for the content of this announcement.
Exhibit 99.1
Caterpillar Inc.
1Q 2019 Earnings Release
April 24, 2019
FOR IMMEDIATE RELEASE
Caterpillar Reports First-Quarter 2019 Results
Achieved Record First-Quarter Profit Per Share on Higher Sales and Revenues
First Quarter
($ in billions 2019 2018 - First-quarter sales
except profit and revenues
per share) increased 5%
- Record
first-quarter
profit per share
Sales and $13.5 $12.9 - Profit per share
Revenues outlook now $12.06
to $13.06 due to a
first-quarter
discrete tax
benefit of $0.31
per share
Profit Per $3.25 $2.74
Share
- Repurchased $751
million in company
stock
DEERFIELD, Ill. - Caterpillar Inc. (NYSE: CAT) today announced first-quarter 2019 sales and revenues of $13.5 billion, compared with $12.9 billion
in the first quarter of 2018, a 5% increase. First-quarter 2019 profit of $3.25 per share was a first-quarter record. This was a 19% increase
compared with the previous record first-quarter profit per share of $2.74 in 2018.
Profit per share in the first quarter of 2019 included a discrete tax benefit related to U.S. tax reform of $178 million, or $0.31 per share.
Profit per share in the first quarter of 2018 included restructuring costs of $0.08 per share.
During the first quarter of 2019, Machinery, Energy & Transportation (ME&T) operating cash flow was $860 million. In the first quarter of 2019,
the company repurchased $751 million of Caterpillar common stock and paid dividends of $494 million. The enterprise cash balance at the end of the
first quarter of 2019 was $7.1 billion.
"The global Caterpillar team delivered record first-quarter profit per share," said Caterpillar Chairman and CEO Jim Umpleby. "We are executing
our strategy for profitable growth by investing in services, expanding our offerings and improving operational excellence."
2019 Outlook
The company continues to have confidence in the fundamentals of its diverse end markets, and expectations for 2019 performance are unchanged.
However, due to a $0.31 per share discrete tax benefit, Caterpillar is revising its profit per share outlook to a range of $12.06 to $13.06,
compared with the previous outlook range of $11.75 to $12.75. The first-quarter discrete tax benefit of $178 million, or $0.31 per share, is
related to U.S. tax reform as a result of final regulations recently issued by the U.S. Treasury. The outlook does not include a mark-to-market
gain or loss for remeasurement of pension and other postemployment benefit plans, which will be excluded from adjusted profit per share in the
fourth quarter of 2019 along with any other discrete items.
CONSOLIDATED RESULTS
Consolidated Sales and Revenues
The chart above graphically illustrates reasons for the change in Consolidated Sales and Revenues between the first quarter of 2018 (at left) and
the first quarter of 2019 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of
Directors and employees.
Total sales and revenues of $13.466 billion in the first quarter of 2019, increased $607 million, or 5%, compared with $12.859 billion in the
first quarter of 2018. The increase was primarily due to higher sales volume driven by improved demand for both equipment and services, with the
most significant increase in Resource Industries. Sales volume also increased in Construction Industries, while Energy & Transportation was about
flat. Sales grew in all regions except for EAME, with the largest gains in North America and Asia/Pacific. Favorable price realization, primarily
in Construction Industries and Resource Industries, also contributed to the sales improvement. The increase was partially offset by unfavorable
currency impacts due to a stronger U.S. dollar.
Sales and Revenues by Segment
(Millions of First Sales Price Currency Inter-Segment / First $ %
dollars) Quarter Other Quarter
2018 2019
Volume Realization Change Change
Construction $ 5,6 $ 164 $ 156 $ (127 ) $ 3 $ 5,8 $ 196 3%
Industries.. 77 73
......
Resource 2,309 371 110 (42 ) (21 ) 2,727 418 18%
Industries..
........
Energy & 5,219 21 27 (91 ) 34 5,210 (9 ) -%
Transportati
on.......
All Other 116 1 - (1 ) 5 121 5 4%
Segment.....
......
Corporate (1,17 ) (14 ) (1 ) - (21 ) (1,20 ) (36 )
Items and 1 7
Eliminations
..
Machinery, $ 12, $ 543 $ 292 $ (261 ) $ - $ 12, $ 574 5%
Energy & 150 724
Transportati
on
Financial $ 793 $ - $ - $ - $ 57 $ 850 $ 57 7%
Products
Segment.....
Corporate (84 ) - - - (24 ) (108 ) (24 )
Items and
Eliminations
..
Financial $ 709 $ - $ - $ - $ 33 $ 742 $ 33 5%
Products
Revenues...
Consolidated $ 12, $ 543 $ 292 $ (261 ) $ 33 $ 13, $ 607 5%
Sales and 859 466
Revenues
Sales and Revenues by Geographic Region
North Latin EAME Asia/Pacific External Inter-Segment Total
America America Sales and Sales and
Revenues Revenues
(Millions of $ % Chg $ % $ % Chg $ % $ % $ % Chg $ %
dollars) Chg Chg Chg Chg
First
Quarter 2019
Construction $ 2, 13% $ 319 (7%) $ 1, (6%) $ 1,5 (4%) $ 5, 3% $ 21 17% $ 5, 3%
Industries.. 96 00 62 85 87
..... 5 6 2 3
Resource 951 19% 423 18% 468 (10%) 805 52% 2,64 20% 80 (21%) 2,72 18%
Industries.. 7 7
......
Energy & 2,15 (3%) 332 19% 1,03 (5%) 718 6% 4,23 (1%) 977 4% 5,21 -%
Transportati 1 2 3 0
on......
All Other 8 (47%) - -% 11 175% 18 -% 37 -% 84 6% 121 4%
Segment.....
....
Corporate (41 ) 1 (3 ) (2 ) (45 ) (1,162 ) (1,2 )
Items and 07
Eliminations
..
Machinery, 6,03 7% 1,075 9% 2,51 (6%) 3,101 9% 12,7 5% - -% 12,7 5%
Energy & 4 4 24 24
Transportati
on
Financial 558 9% 70 (5%) 102 1% 120 13% 850 7% - -% 850 7%
Products
Segment....
Corporate (69 ) (11 ) (9 ) (19 ) (108 ) - (108 )
Items and
Eliminations
..
Financial 489 6% 59 (3%) 93 (3%) 101 13% 742 5% - -% 742 5%
Products
Revenues...
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April 29, 2019 17:52 ET (21:52 GMT)
Consolidated $ 6, 7% $ 1,1 8% $ 2, (6%) $ 3,2 9% $ 13 5% $ - -% $ 13 5%
Sales and 52 34 60 02 ,4 ,4
Revenues 3 7 66 66
First
Quarter 2018
Construction $ 2, $ 344 $ 1, $ 1,6 $ 5, $ 18 $ 5,
Industries.. 62 06 28 65 67
..... 0 7 9 7
Resource 798 360 520 530 2,20 101 2,30
Industries.. 8 9
......
Energy & 2,22 280 1,09 679 4,27 943 5,21
Transportati 5 2 6 9
on......
All Other 15 - 4 18 37 79 116
Segment.....
....
Corporate (28 ) 1 (3 ) - (30 ) (1,141 ) (1,1 )
Items and 71
Eliminations
..
Machinery, 5,63 985 2,68 2,855 12,1 - 12,1
Energy & 0 0 50 50
Transportati
on
Financial 512 74 101 106 793 - 793
Products
Segment....
Corporate (49 ) (13 ) (5 ) (17 ) (84 ) - (84 )
Items and
Eliminations
..
Financial 463 61 96 89 709 - 709
Products
Revenues...
Consolidated $ 6, $ 1,0 $ 2, $ 2,9 $ 12 $ - $ 12
Sales and 09 46 77 44 ,8 ,8
Revenues 3 6 59 59
Consolidated Operating Profit
The chart above graphically illustrates reasons for the change in Consolidated Operating Profit between the first quarter of 2018 (at left) and
the first quarter of 2019 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of
Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation other operating (income)
expenses.
Operating profit for the first quarter of 2019 was $2.207 billion, compared with $2.108 billion in the first quarter of 2018. The increase of $99
million was mostly due to favorable price realization and higher sales volume, partially offset by higher manufacturing costs and increased
selling, general and administrative (SG&A) and research and development (R&D) expenses. The increase in manufacturing costs was primarily due to
higher variable labor and burden, including freight costs, and material costs, including tariffs. SG&A/R&D expenses were higher primarily due to
increased targeted investments and timing of corporate-level expenses, partially offset by lower short-term incentive compensation expense.
Operating profit margin was 16.4% for the first quarter of 2019 and 2018.
Profit by Segment
(Millions of First First $ %
dollars) Quarter Quarter
2019 2018
Change Change
Construction $ 1,0 $ 1,1 $ (32 ) (3 %)
Industries... 85 17
.............
......
Resource 576 378 198 52 %
Industries...
.............
........
Energy & 838 874 (36 ) (4 %)
Transportatio
n............
.........
All Other 25 57 (32 ) (56 %)
Segment......
.............
......
Corporate (375 ) (371 ) (4 )
Items and
Eliminations.
.............
.
Machinery, $ 2,1 $ 2,0 $ 94 5 %
Energy & 49 55
Transportatio
n...........
Financial $ 211 $ 141 $ 70 50 %
Products
Segment......
............
Corporate (46 ) (2 ) (44 )
Items and
Eliminations.
.............
.
Financial $ 165 $ 139 $ 26 19 %
Products.....
.............
.....
Consolidating (107 ) (86 ) (21 )
Adjustments..
.............
..
Consolidated $ 2,2 $ 2,1 $ 99 5 %
Operating 07 08
Profit.......
.........
Other Profit/Loss and Tax Items
The provision for income taxes in the first quarter of 2019 reflected an estimated annual tax rate of 26%, compared with 24% for the first quarter
of 2018, excluding the discrete items discussed in the following paragraph. The increase was largely driven by the application of U.S. tax reform
provisions to the earnings of certain non-U.S. subsidiaries, which do not have a calendar fiscal year-end. These provisions did not apply to these
subsidiaries in 2018.
As a result of final regulations received in January 2019 related to the mandatory deemed repatriation of non-U.S. earnings due to U.S. tax
reform, Caterpillar recorded a discrete tax benefit of $178 million in the first quarter of 2019. In addition, a discrete tax benefit of $23
million was recorded in the first quarter of 2019, compared with $40 million in the first quarter of 2018, for the settlement of stock-based
compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense.
CONSTRUCTION INDUSTRIES
(Millions of
dollars)
Segment Sales
First Sales Price Currency Inter-Segment First $ %
Quarte Volume Realizati Quarte
r 2018 on r 2019
Change Change
Total Sales $ 5, $ 164 $ 156 $ (127 ) $ 3 $ 5, $ 196 3 %
67 87
7 3
Sales by Geographic Region
First First $ %
Quarte Quarter
r 2019 2018
Change Change
North America $ 2, $ 2,6 $ 345 13 %
96 20
5
Latin America 319 344 (25 ) (7 %)
EAME 1,00 1,067 (61 ) (6 %)
6
Asia/Pacific 1,56 1,628 (66 ) (4 %)
2
External 5,85 5,659 193 3 %
Sales 2
Inter-segment 21 18 3 17 %
Total Sales $ 5, $ 5,6 $ 196 3 %
87 77
3
Segment Profit
First First %
Quarte Quarter
r 2019 2018
Change Change
Segment $ 1, $ 1,1 $ (32 ) (3 %)
Profit 08 17
5
Segment 18.5 % 19.7 % (1.2 pts)
Profit Margin
Construction Industries' total sales were $5.873 billion in the first quarter of 2019, compared with $5.677 billion in the first quarter of 2018.
The increase was mostly due to higher end-user demand for construction equipment, partially offset by a smaller increase in dealer inventories
compared with the first quarter of 2018. Favorable price realization was partially offset by unfavorable currency impacts due to a stronger U.S.
dollar.
? In North America, the sales increase was driven by higher demand for new equipment, primarily to support road construction activities. Favorable
price realization also contributed to the sales improvement.
? Construction activities remained at low levels in Latin America.
? In EAME, the sales decrease was primarily due to a smaller increase in dealer inventories compared with the first quarter of 2018, and a weaker
euro, partially offset by favorable price realization.
? Sales in Asia/Pacific declined due to unfavorable currency impacts.
Construction Industries' profit was $1.085 billion in the first quarter of 2019, compared with $1.117 billion in the first quarter of 2018. The
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