Caterpillar FS affected by construction downturn

With sales in yellow metal having
collapsed by over 20 percent across Europe and North America over
the past quarter, asset finance in this sector has also taken a hit
with Caterpillar Financial Services reporting worldwide profit
after tax for third quarter at €92.3 million, down 11 percent
compared to third quarter 2007.

Meanwhile Caterpillar FS’ parent Caterpillar Inc saw a worldwide
profit slump of 6.4 percent year-on-year at the end of quarter
three, to €677 million from €724 million.

Despite the damage to profits, Caterpillar Inc and Caterpillar
FS both saw interannual revenue increases in Q3 figures.
Caterpillar Inc overall saw sales and revenues rise 13 percent to
reach €6.3 billion, while Financial Services worldwide reported
just a 2 percent rise to €604 million.

In each case, though, the growth was fuelled by activity outside
the decaying European and North American markets, the prime example
being Caterpillar Inc’s 44 percent sales increase in the
Asia-Pacific region, to €342 million.

Within the Europe, Africa and Middle East markets, Caterpillar
Inc reported a 5 percent increase in sales volume to €81
million.

The message from the top was one of resilience, however, with
Caterpillar Inc vice-president and Caterpillar FS president Kent
Adams making the case the company had seen worse.

“Past dues, at 3.64 percent, remain well below the most recent
recessionary period of 2001-2002,” said Kent. “Similarly, September
2008 year-to-date annualised net write-offs, at 0.32 percent of our
average retail portfolio, are also well below what we experienced
in 2001-2002.”

Fred Crawley